Tesla Inc. (NASDAQ:TSLA) has urged the Delaware Supreme Court to restore CEO Elon Musk‘s $56 billion pay package it struck down in 2024.
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Tesla Calls Shareholder Vote “Most Informed” Decision
Lawyers for the EV giant argued that the shareholder vote to ratify the pay package for Musk was “the most informed stockholder vote in Delaware history,” according to a report by Reuters on Wednesday. Musk was reportedly not in attendance at the hearing.
“Shareholders in 2024 knew exactly what they were voting for,” Jeffrey Wall, a lawyer representing Tesla in the lawsuit, argued in court, the report said. Greg Varallo, an attorney representing investor Richard Tornetta who filed the lawsuit, said that accepting the ratification would mean that “lawsuits would be interminable,” the report said.
Elon Musk’s New Trillion-Dollar Pay Package, Shareholder Meeting In November
The news comes as Tesla unveiled a new pay package for Musk, which would make him a trillionaire if all the stipulated milestones in the award were reached by Tesla. The pay package could also give Musk more control over Tesla, something that the billionaire has expressed concerns about in the past.
Despite the lofty targets laid down in the compensation award, Musk still stands to gain billions of dollars in wealth even if he helps Tesla reach one or two of the milestones laid down in the award, an investigation into the package revealed.
Tesla had earlier revealed a $29 billion pay package for Musk, which could grant him 96 million shares in the EV giant. However, the package wouldn’t be valid if the Delaware court reinstates Musk’s $56 billion pay package.
Tesla is set to hold its shareholder meeting in November to vote on the new package, which, according to Tesla bull Dan Ives, would be the key focus of the meeting. The EV giant’s board has urged investors to vote in favor of all the recommendations laid down by it, while Tesla’s Chair for the Board, Robyn Denholm, called Musk a “once-in-a-generation visionary.”
Elon Musk’s $1 Billion Stock Purchase
Musk also recently purchased over $1 billion in Tesla stock, which led to a stock rally that saw TSLA smash the $420 price mark. TSLA currently trades for $434.36 in Premarket trading, according to Benzinga Pro data.
However, his decision was criticized by Gerber Kawasaki‘s co-founder Ross Gerber, who urged the CEO to buy more equity instead of taking it from shareholders.
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