A US district judge has once again rejected Elon Musk’s $56 billion pay package, the largest ever proposed for a corporate executive, according to a Bloomberg report.
This marks the second time that Delaware Chancery Court Judge Kathaleen St. J. McCormick has ruled against the compensation plan. The decision follows a previous ruling in January, where the judge also deemed the pay package improper.
Despite shareholder backing for the payout, Judge McCormick found that Tesla’s board of directors had been “improperly influenced” by Musk when agreeing to the terms of the package. The ruling casts a shadow over the wealth of the world’s richest person, though it has little immediate impact on Musk’s financial standing.
Tesla’s stock price continues to rise, and Musk’s fortune remains intact, largely due to the company’s continued growth and his high-profile ties with political figures such as President-elect Donald Trump.
The judge’s decision strikes down a pay package that initially valued at $2.6 billion but surged to $56 billion over time, and by the end of November, it was worth an astonishing $101.5 billion. In her 101-page ruling, McCormick criticized the Tesla board for yielding to Musk’s demands instead of independently determining an appropriate compensation amount. “There were undoubtedly a range of healthy amounts that the board could have decided to pay Musk. Instead, the board capitulated to Musk’s terms,” McCormick wrote.
While Tesla has vowed to appeal the decision to the Delaware Supreme Court, the ruling forces the company’s board to reconsider the pay package. If the appeal fails, the board will likely have to submit a revised proposal. The case could take months to resolve.
Musk, who has been vocal in his criticism of the ruling, took to his social media platform X (formerly Twitter), calling the decision “absolute corruption.”