Earlier this year, Musk appealed a trial court’s decision to strike down his 2018 compensation package.
The Delaware Supreme Court has scheduled oral arguments for October 15 in Dover, Delaware, in Tesla Inc. and CEO Elon Musk’s appeal of a trial court’s decision to strike down the CEO’s 2018 compensation plan, Bloomberg reported on Tuesday.
The high court’s full five-member panel will hear the case, the report said. The Delaware Chancery Court struck down Musk’s record $56 billion Tesla compensation package, initially approved in 2018, based on a lawsuit from a shareholder named Richard Tornetta in January 2024. The court deemed the package excessive and noted that the process of approval was “deeply flawed.”
Tesla held a second shareholder vote on the compensation in June, but the court dismissed it as well in December. Musk subsequently moved Tesla’s state of incorporation to Texas from Delaware and appealed the court’s decision earlier this year.
On Stocktwits, retail sentiment around Tesla trended in the ‘extremely bullish’ territory, coupled with ‘low’ message volume. According to Stocktwits data, retail chatter around Tesla, which has the largest number of watchers on the platform, jumped 247% over the past 30 days.
A Stocktwits user, however, opined that the court will not reinstate the 2018 pay package.
Earlier this month, Tesla said that it approved an award of 96 million shares of restricted stock to Musk in a bid to incentivize the CEO to remain with the company. These were valued at about $29 billion based on their closing price on August 1.
The new package will be forfeited and returned to the company if, before vesting, there is a final judgment in the ongoing court case about Musk’s 2018 pay package that results in him becoming able to fully exercise the performance-based stock option award he was granted in January 2018, the company said.
Tesla directors Robyn Denholm and Kathleen Wilson-Thompson also said in a letter to shareholders that the special committee established by the company’s board of directors to consider matters concerning Musk’s pay package continues to work to address a longer-term CEO compensation strategy, which it plans to put to a shareholder vote at a November 6 annual meeting.
TSLA stock is down by 16% this year but up by about 72% over the past 12 months.
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