Tesla and CEO Elon Musk are set to appeal a court decision that voided Musk’s $56 billion pay package due to concerns over its structure and approval process.
The legal saga began when Tesla shareholder Richard Tornetta contested the pay package, arguing it was excessively generous and lacked transparent approval from shareholders. Judge McCormick’s decision to rescind the package highlighted concerns about Musk’s influence over the negotiation process and questioned whether shareholders were adequately informed when they overwhelmingly approved the package in 2018.
In response, Musk and Tesla have signaled their intention to appeal the decision, seeking to stay the ruling until their appeal is resolved, according to Reuters. Both parties will submit a proposed final order for Judge McCormick’s approval by March 1, 2024, which will include a request for legal fees. These fees, expected to be among the largest ever due to the significant verdict, will be covered by Tesla, although it is anticipated that the company will contest this expense.
This move was revealed through a court filing and a letter from Greg Varallo, the attorney representing Tornetta, indicating both parties’ willingness to negotiate an appeal bond.
This bond serves as a financial safeguard, ensuring that the plaintiff is compensated if the appeal does not lead to a reversal of the decision.
If Judge McCormick approves the fee and final order, Tesla and Musk will then have sixty days to file an appeal with the Delaware Supreme Court, which is estimated will take at least 60 days to resolve.
Since the ruling came down, Musk has criticized the Delaware court’s handling of the case. He has even asked for a shareholder vote to move Tesla’s state of incorporation to Texas, where the company already has its headquarters.
Musk has already moved one of his other companies out of Delaware, with The Boring Company now being registered in Nevada.
