Tesla has asked shareholders to vote on CEO Elon Musk’s $56 billion pay bundle three months after a Delaware judge voided the deal.
In a Wednesday filing, the electric vehicle firm said it strongly disagreed with Delaware Chancery Court Chancellor Kathaleen McCormick’s decision to void Mr. Musk’s pay package in January.
“The company and the board believe that the decision in Tornetta [named for Tesla shareholder Richard Tornetta] ignored material evidence presented at trial and that the Delaware court made errors of fact and incorrect conclusions of law,” Tesla wrote in the filing.
The company said dozens of shareholders told Tesla they disagreed with Chancellor McCormick’s decision.
In the filing, Tesla also said it would ask for shareholder approval to move the company’s incorporation from Delaware to Texas. After the pay package was voided in January, Mr. Musk posted on X that business owners should “never incorporate your company in the state of Delaware.”
Delaware is home to many Fortune 500 companies due to its lucrative tax benefits and extensive corporate legal protection.
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The $56 billion pay package was voided after Mr. Tornetta brought a lawsuit against Tesla, accusing the company of colluding with Mr. Musk to secure him a large payout.
Chancellor McCormick agreed with the shareholder, finding that Tesla’s compensation board was essentially controlled by Mr. Musk and helped him secure the largest pay package possible.
“Put simply, neither the Compensation Committee nor the board acted in the best interests of the company when negotiating Musk’s compensation plan,” the judge wrote in her decision. “In fact, there is barely any evidence of negotiations at all. Rather than negotiate against Musk with the mindset of a third party, the Compensation Committee worked alongside him, almost as an advisory body.”
• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.
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