Business Maverick

Business Maverick

Tesla investors sound off to judge who voided Musk mega-pay plan

Tesla investors sound off to judge who voided Musk mega-pay plan
Tesla and X owner Elon Musk during a visit to the former German Nazi concentration camp Auschwitz II-Birkenau in Birkenau, Poland, 22 January 2024. (Photo: EPA-EFE/ZBIGNIEW MEISSNER POLAND OUT)

The judge who threw out Tesla Inc. co-founder Elon Musk’s record-setting $55.8-billion pay package said she’s received “many communications” from investors about the request from the winning lawyers for almost $6-billion in company stock. 

Delaware Chancery Court Chief Judge Kathaleen St. J. McCormick said she’s not reading the letters. The state judiciary’s ethics code “prohibits me from considering” the letters from non-parties in the litigation “who claim to hold stock in Tesla,” she wrote to lawyers on both sides. She asked the attorneys to recommend a process for handling the letters.

In January, McCormick concluded that the compensation plan — the largest ever given to a corporate executive in the US — was excessive and that Tesla’s directors were handcuffed by conflicts of interest when they approved it in 2018. The judge also faulted Tesla’s public disclosure about the pay package. 

This month, lawyers representing the investor who challenged the pay package, Richard Tornetta, submitted an unusual request to be paid their fees in stock — which they said would ease the burden on company shareholders.

That didn’t go over well with some investors, who launched a letter-writing campaign.

Shareholder Alexandra Merz urged fellow investors in a post on social media platform X to “send tens of thousands of letters” to McCormick and “describe in your own passionate words in a VERY RESPECTFUL MANNER” how there is no financial benefit from the judge’s ruling striking down the pay package that “could serve as the basis of calculation for plaintiff attorney fees”. 

“Elon Musk deserves the original compensation package in full,” reads another X post. “On top of that, I was surprised to learn that the lawyers who filed and ‘won’ this Class Action lawsuit demanded a roughly $5.9-billion compensation in Tesla shares, claiming it was to protect Tesla shareholders. Nothing could be further from the truth.”

Doing my part as a $TSLA shareholder#DelawareCourt81 #Tesla@TeslaBoomerMama @elonmusk pic.twitter.com/u2Tes11G2g

— Fabian Ebert (@Fabian10O) March 10, 2024

Greg Varallo, a lawyer for Tornetta, declined to comment. Evan Chesler, one of Musk’s attorneys, didn’t immediately respond after regular business hours to an email seeking comment.

Gallery

Comments - Please in order to comment.

  • Deon Botha-Richards says:

    5.9 billion. For a short legal case. Wow. Some fee. Maybe the plaintive should just pay them. Oh wait there’s no settlement so where would the money come from…

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

Daily Maverick Elections Toolbox

Download the Daily Maverick Elections Toolbox.

+ Your election day questions answered
+ What's different this election
+ Test yourself! Take the quiz