Elon Musk suffers serious setback in US court

He has his own board of directors, but a US judge thinks Tesla boss Elon Musk is in the wrong.Image: trapezoid

In June, Tesla shareholders again agreed to provide Musk with billions of dollars in double-digit shares. Once again, a US judge sees things differently. Your reasoning makes you stand up and take notice.

Christopher Cohen/t-online

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Things have been going pretty smoothly for the world's richest man in recent months. Elon Musk becomes one of Donald Trump's most important advisers. He was awarded a government advisory position by Trump after strongly supporting his presidential campaign for re-election as the US president. From now on, Musk will lead a newly created agency to reduce bureaucracy.

Critics are concerned that the Tesla owner will soon regulate himself in this function, creating a significant advantage for his many companies.

However, Musk has not yet been able to influence US courts. It was here, in a Delaware courtroom, that the entrepreneur suffered a painful setback. Despite support from shareholders of electric car maker Tesla, the judge opposed agreeing to pay a $54 billion bonus to the CEO.

The package is currently worth more than $100 billion

It's already the beginning of the year Catherine McCormick It was decided that Musk was not entitled to the money. She defended her decision by saying that the company bosses had too much backstage influence when they agreed to the 2018 rights issue.

Kathhaleen McCormick, attorney and U.S. judge. Screenshot: Twitter

Richter's Catherine McCormick.Screenshot: Twitter

In January, the president of the Delaware Chancery Court spoke of the “incredible amounts” and deemed the planned damages too high.

The total value of the compensation plan was originally planned to be US$2.6 billion, but due to the sharp rise in Tesla's stock price, it had increased to US$56 billion by the time of the initial decision. Based on Monday's closing price, it will be worth more than $100 billion.

Shareholders are kept in the dark

A judge concluded earlier this year that Musk had close ties to Tesla board members and that he negotiated generous compensation with them.

However, shareholders were kept in the dark until the first vote. The judge explained her sentence at the time, which meant they would not have the opportunity to make a considered decision. She therefore supported the plaintiffs' desire to cancel the agreement with Musk.

Tesla shareholder Richard Tornetta files lawsuit over pay. He argued in court that the goals set for Musk were easily achievable. Musk doesn't even need to devote all his time to the automaker. Even then, he was only a part-time boss, as he also ran the space rocket company SpaceX. Musk also later acquired the social media platform Twitter and renamed it X.

Tesla shareholders actually approved another huge share package in June, but that doesn't mean Musk will get justice in court. Tesla can still take action on the current decision. However, even without a pay package, Musk would still be the world's richest man.

Tesla stock benefits from Musk's proximity to Trump

Tesla shares fell 2% to about $349 in after-hours trading in the United States on Monday. When the judge issued his first decision earlier this year, the documents cost less than $200.

Tesla shares have benefited recently from Musk's close relationship with U.S. President-elect Trump. Trump and Musk have made numerous appearances together, including at campaign events and at a recent Thanksgiving dinner, where Musk was given the nickname “First Buddy,” the president's best friend.

Stock market investors have high hopes for Musk's stock going forward, especially as the 54-year-old Musk's new role as a government adviser could have a huge impact on his company's economic health.

Beyond that, stock exchange investors want to create a government framework for fully autonomous vehicles, which could also benefit Tesla's robotaxis. Tesla's market capitalization rose again to more than $1.1 trillion due to price increases.

die American Sociology Brooke Harrington has recently warned that Musk and other tech billionaires are increasingly influencing U.S. government policy. She believes that people such as Musk, Peter Thiel and Jeff Bezos have obvious anti-democratic tendencies. Harrington said of Musk’s plans for ZDF:

“He spread the idea that there shouldn't be democracy but 'strongman' rule. In other words: people like Elon Musk.”