The total value of the package consisting of options and Tesla shares was about 100 billion dollars on Monday.
The massive remuneration package approved by the shareholders of the electric car maker Tesla, the company’s CEO For Elon Musk is again casualty in the Delaware court in the United States.
Tesla’s planned compensation package for Musk consists of options for approximately 12 percent of Tesla’s shares, so the actual size of the compensation Musk receives depends on the performance of Tesla’s stock. The conditions for obtaining the option rights for the ten-year package were to achieve certain set goals related to the development of Tesla’s market value, profit and turnover.
The total value of the option package in January was approximately USD 56 billion. At the end of the trading day on Monday, it was around 100 billion dollars.
Investors initially approved the package in 2018, but a Delaware judge Kathaleen McCormick canceled the package in January of this year as unreasonable and unfair to the shareholders.
According to McCormick, the shareholders had not been sufficiently informed about the background of the decision and Tesla’s board could not be considered independent in driving the reward.
In June, shareholders voted to approve the bonus package again. On Monday, McCormick decided that the June vote would not change his January decision to rescind the compensation package.
If the package goes through, it would be the largest remuneration paid to a director of a US company.
Tesla plans to appeal
Tesla said owned by Musk X-message service that the company plans to appeal the judge’s decision.
Musk also commented on the decision in his message service.
– Shareholders should control company votes, not judges, Musk wrote.
The shareholder who sued Tesla and Musk had accused Musk himself of defining the terms of his remuneration package for the company’s board, which was not independent enough in its relationship with CEO Musk.
Musk has said he did not influence the creation of the compensation package or discuss the deal with board members.