Delaware Judge Chancellor Kathaleen McCormick has noted that she feels assured that Tesla would not use its upcoming 2024 Annual Stockholders’ Meeting as a way to attack her decision to rescind the CEO’s 2018 pay package. This was despite the legal team of TSLA shareholder Richard Tornetta alleging that Tesla and Musk may attempt to work around McCormick’s ruling in another jurisdiction.
Last month, the legal team of TSLA shareholder Richard Tornetta — who held nine shares of the EV maker when he filed his complaint against Musk’s compensation plan — had asked McCormick to prevent their case from being undone in Texas court, as noted in a Reuters report. Tornetta’s legal team shared their concerns in a court filing last month.
Tesla, for its part, noted that Tornetta’s legal team’s claims were “rank speculation.” The company’s legal team also noted that Delaware would retain jurisdiction over the dispute surrounding Musk’s 2018 compensation plan. These comments seem to have been taken by McCormick as assurance that Tesla would not be looking to work around her ruling.
“If I have interpreted the defendants’ position incorrectly, then defense counsel – as officers of the court – are duty-bound to correct it. In the meantime, the defendants’ statements give me great comfort,” the Delaware Judge wrote in a letter.
Among the proposals up for a shareholder vote at the 2024 Annual Shareholder Meeting is the ratification of Elon Musk’s 2018 compensation plan, as well as the reincorporation of Tesla from Delaware to Texas. Tesla has been urging shareholders to vote on the matter, as evidenced by the launch of a dedicated website about the issue, as well as perks like a guided tour of Giga Texas.
Accounting for Tesla’s stock splits over the years, Elon Musk’s 2018 pay package was signed at a time when Tesla was trading at below $20 per share. Thus, despite TSLA shares falling significantly from their peak of over $1 trillion, the company is still worth several times its valuation when Musk’s 2018 pay package was approved. It should be noted that all of Musk’s targets for his 2018 pay package have been successfully achieved.
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