Electric vehicle (EV) giant Tesla Inc. and its CEO, Elon Musk, have been granted permission to appeal a ruling that voided Musk’s $56 billion pay package. The decision was made by Chancellor Kathaleen McCormick of the Court of Chancery, who issued an order opening a 30-day window for Tesla and Musk to appeal to the Delaware Supreme Court.
Background
The Delaware Chancery Court initially ruled in January that the $56 billion pay package would be voided, citing that Tesla’s board was influenced by Musk when they adopted the plan in 2018. Despite this, Tesla shareholders voted in June to reinstate the package. However, Chancellor McCormick again ruled against the package earlier this month.
Why It Matters
Tesla has stated that it deems the ruling to be incorrect and intends to appeal to the Delaware Supreme Court. The company has also expressed that the judge overruled a supermajority of shareholders. However, the Delaware Supreme Court may take around a year to issue a ruling.
Additional Developments
Tesla will also be able to appeal Chancellor McCormick’s order directing the company to pay $345 million to the attorneys who represented the minor shareholder who sued to rescind the pay package.
Key Takeaways
- Tesla and Elon Musk have been granted permission to appeal the ruling that voided Musk’s $56 billion pay package.
- The appeal process may take around a year to complete.
- Tesla has expressed its intention to appeal the ruling, citing that the judge overruled a supermajority of shareholders.