The compensation package would have made Musk the highest-paid executive ever.
Tesla CEO and X owner Elon Musk listens as President-elect Donald Trump speaks during a meeting with House Republicans at the Hyatt Regency hotel in Washington, Nov. 13, 2024.The renewed attempt to secure compensation for Musk suffered from "fatal flaws," Chancellor Kathaleen McCormick of the Court of Chancery said in herTuesday on X, which Musk owns, he criticized the ruling. "Shareholders should control company votes, not judges," Musk said.
Shareholders again ruled in favor of the package even after the flaws of the initial negotiation had been fully disclosed, Musk's attorneys argued, further claiming that the second shareholder vote made up for the initial problems with the compensation package that McCormick noted. "The collection of features characterizing Musk's relationship with Tesla and its directors gave him enormous influence over Tesla," McCormick wrote in her
In other words, stockholders cannot ratify an agreement if the process behind it was improper, McCormick said.. The term "conflicted-controller transaction" refers to the conflict of interest McCormick initially found in the role Musk played in negotiations.
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