Elon Musk’s attorneys are in Delaware today, pleading with Judge Kathaleen McCormick to vacate her decision to invalidate the Tesla CEO’s $56 billion pay package that was ratified by shareholders this past June.
In January, Judge McCormick said Musk’s $56 billion pay package was invalidated because she felt it was an “unfathomable sum.” The voided pay was then ratified, for a second time, by investors at the June Tesla Shareholders meeting, but it did not mean Musk would receive the pay.
Now, attorneys are in Delaware attempting to get Musk paid by bringing up the second ratification to Judge McCormick. Judge David Ross said to McCormick today at a hearing that the vote by shareholders in June should be honored:
“Honoring the shareholder vote would affirm the strength of our corporate system. This was stockholder democracy working.”
Ross said the defendants were not challenging the conclusions or facts in her ruling, but that the order she wrote telling Tesla to rescind the pay package be vacated, Detroit News said.
McCormick did not seem enthused because it could set precedence that rulings could be challenged and then overturned. Delaware law has no previous record of post-trial shareholder votes ratifying what she believes is a breach of fiduciary duty.
Attorneys are baffled that Delaware law somehow overrules what investors, also known as owners of the company, voted for in what was overwhelming fashion earlier this year:
“I candidly don’t see how Delaware law can tell the owners of the company that they’re not entitled to make the decision they made.”
Donald Verrilli, another lawyer for an individual shareholder, said:
“The voice of the majority of shareholders should matter…. This lawsuit is not representing the interest of the shareholders.”
It seems undecided whether Musk’s pay package will be validated by McCormick, although shareholders have voted that it should be given.
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