Tesla’s Musk wins reinstatement of $140 billion pay package

Investing.com -- Elon Musk won reinstatement of his 2018 pay package as chief executive of Tesla Inc (NASDAQ: TSLA) after the Delaware Supreme Court reversed a lower court ruling on Friday.

The high court concluded that Musk is entitled to the stock-based compensation plan now valued at nearly $140 billion. When Tesla directors first authorized the payout, it was the largest ever for a US executive, though it has since been surpassed by a separate plan approved by shareholders this year that could be worth $1 trillion if Musk meets future performance targets.

The 2018 compensation plan had been on hold after an investor with just nine shares successfully sued to block it in Delaware, where the electric carmaker was incorporated at the time. Delaware Chancery Court Chancellor Kathaleen McCormick had ruled that despite Tesla shareholders approving the compensation plan twice, the size of the package was unfair to shareholders.

McCormick wrote that the Tesla board "bore the burden of proving that the compensation plan was fair, and they failed to meet their burden."

The Delaware Supreme Court disagreed, ruling that the lower court erred in its opinion and that canceling the 2018 pay package was "inequitable" as it "leaves Musk uncompensated for his time and efforts over a period of six years."

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