Elon Musk Reacts to Ark Investment's Decision to Overturn His Tesla Pay Package, Calls it 'Awesome'

A group of Tesla shareholders, including Cathie Wood’s Ark Investment Management LLC, are appealing the Delaware Chancery court’s decision to block Elon Musk’s $56 billion pay package at the EV company.

What Happened

  • The appeal was filed in the Supreme Court of Delaware by Florida shareholders Ark Investment Management LLC, David Israel, and Kurt Panouses.
  • The decision to appeal comes after Delaware Chancery Court Judge Kathaleen St. J. McCormick voided Musk’s pay package, alleging that Tesla’s board was influenced by the CEO when they adopted the plan in 2018.
  • Tesla shareholders subsequently voted again to reinstate the package in June, but McCormick again ruled against the package in December.

Background

  • Tesla’s board adopted the pay package in 2018, which was later voided by Judge McCormick.
  • Over 70% of Tesla shareholders voted to approve Musk’s pay package in 2018 and again in June 2024.
  • Musk has been vocal about his disagreement with the lawsuit, calling it a “class action” lawsuit that does not represent Tesla shareholders.

Musk Responds

  • Musk reacted to the appeal on social media, calling it “Awesome”.
  • He stated that the original lawsuit was brought by a law firm using a “puppet shareholder”, referring to minor shareholder Richard Tornetta.
  • Musk has previously spoken out about the need for legal reform on class action lawsuits, suggesting that at least 10% of the members of the supposed class should vote in favor of a class action suit.

Next Steps

  • The appeal will be heard by the Delaware Supreme Court, which will review the decision made by Judge McCormick.
  • The outcome of the appeal is uncertain, but it is likely to have significant implications for Tesla and its shareholders.
  • Tesla has been making headlines in recent months, with the company facing increased competition in the EV market.
  • Chinese player BYD has overtaken Tesla as the world’s biggest EV seller in Q4, marking a significant shift in the market.
  • For more information on the future of mobility, check out our coverage of the latest developments in the industry.