Tesla CEO Elon Musk’s $56 Billion Pay Package Controversy Likely to Continue

Tesla’s CEO, Elon Musk, is poised to receive his $56 billion pay package, despite recent legal setbacks. Delaware Chancery Court Chancellor, Kathaleen McCormick, rejected the massive compensation for the second time, overturning the decision of 72% of Tesla’s shareholders who had approved it.

This ruling came as a surprise to many, especially since the pay package had already been approved in 2018. It was earned through various performance tranches, but McCormick dismissed the decision, claiming that the attempt to reverse the ruling was based on evidence created after the trial concluded.

Musk has vehemently opposed the decision, labeling it “absolute corruption.” Despite this, Wedbush analyst Dan Ives believes that Tesla and Musk will fight the ruling relentlessly and that it will eventually reach the Supreme Court. Ives noted that Tesla’s determination to see this through could lead to a significant legal battle, and possibly set a precedent for other public companies in Delaware.

This legal saga has been ongoing for months and was initially sparked by a surprise ruling from McCormick in the Delaware courts. Her decision even prompted Tesla to move its corporate headquarters and operational status from Delaware to Texas.

Ives suggested that this case could become a critical turning point for corporate legal structures, potentially encouraging other businesses to reconsider their incorporation in Delaware due to the implications of this high-profile case. The legal drama surrounding Musk’s compensation has attracted significant attention, especially since shareholders have approved the pay package not once, but twice.

Despite the ongoing battle, Ives remains optimistic about Tesla’s future and maintains a $400 price target on the stock, believing that the company will ultimately succeed in securing Musk’s compensation. According to Ives, the fight is far from over, but Tesla’s persistence suggests that they will eventually secure Musk’s pay package “one way or another.”