Elon Musk attends the America First Policy Institute (AFPI) Gala at Mar-A-Lago in Palm Beach, Florida
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Elon Musk attends the America First Policy Institute (AFPI) Gala at Mar-A-Lago in Palm Beach, Florida, USA
WILMINGTON, Del., Dec 2 (Reuters) - Tesla (TSLA.O) is opening a new tab and cannot offer Elon Musk $56 billion in compensation despite shareholders voting in favor of the company's CEO pay deal, a Delaware judge ruled on Monday. Here's a look at what could happen next for Tesla and its billionaire founder, who is still waiting for a big payout from the company:
WHAT DOES MUSK WANT? Musk told a special committee of Tesla's board shortly after a judge threw out his compensation in January that he wanted a similar-sized replacement package, according to a securities filing. Additionally, earlier this year he said on his social media platform X that he wanted a larger stake in Tesla or could develop some products outside the company. Elon Musk's other companies include the space shuttle company SpaceX and Neuralink, which develops brain implants. TESLA MAY APPEAL THE DECISION
Musk and Tesla's board can appeal and try to overturn the decision in the Delaware Supreme Court, a process that usually takes about a year.
TESLA may develop a new plan
Tesla's board could develop a new compensation package, although it could be very expensive. The original plan, agreed by Musk and the company in 2018, gave him stock options if the company met very ambitious performance and financial objectives. The stock options allow Musk to buy Tesla shares at 2018 levels. Advertisement ยท Scroll to continue
Tesla booked a $2.6 billion cost when the 2018 plan went into effect. The company said a replacement plan for the same cost today would likely be less than 10% of the size of the 2018 plan.
Tesla could offer Musk the same $304 million in stock options at the same $23.34 strike price used in the 2018 plan if shareholders wanted to contest that, which they would have to file a lawsuit in Texas, where the company reincorporated this year. Delaware Cancer Court.
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