During the New York Times annual DealBook summit in New York City, on Nov. 29, 2023, Elon Musk, the CEO of Tesla and SpaceX and owner of X (formerly Twitter), shared his thoughts. Michael M. Santiago | Getty Images In a recent development, a Delaware judge invalidated Tesla CEO Elon Musk’s $56 billion pay package, stating that the company’s board of directors had “failed to ensure that the compensation plan was fair.” In response to the news of the ruling, Tesla’s share price dropped by approximately 3% in after-hours trading on Tuesday. The lawsuit was filed by Richard Tornetta, a shareholder in the electric automaker. In her ruling, Delaware Chancery Court Judge Kathaleen McCormick agreed that Musk’s compensation package had been improperly set by Tesla’s board and stated, “The plaintiff is entitled to rescission.” McCormick also instructed the parties to collaborate on a final order to implement the decision and submit a joint letter identifying all issues, including fees, to conclude the matter at the trial level. The CEO pay package that Tesla granted Musk in 2018 was unprecedented in corporate compensation history and propelled the Tesla and SpaceX CEO into the centi-billionaire club, making him the richest person on the planet. CNBC has reached out for comment from Musk, his lawyer, and Tornetta’s attorney. In a tweet later on, Musk wrote, “Never incorporate your company in the state of Delaware.”- Additional reporting by CNBC’s Lora KolodnyThis is breaking news. Please check back for updates.
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