Elon Musk railed against a Delaware judge who on Monday ruled against reinstating Musk’s $56 billion pay package from Tesla.
“The large and talented group of defense firms got creative with the ratification argument, but their unprecedented theories go against multiple strains of settled law,” Delaware Chancellor Kathaleen St. J. McCormick wrote in her 103-page ruling.
“Absolute corruption,” Musk wrote on his website, X, formerly Twitter, in response to the ruling.
Billy Markus, who created Dogecoin, described McCormick as an “activist judge” on X, writing, “so instead of doing what the shareholders voted for, activist judge kathaleen mccormick instead makes tesla shareholders pay $345 million dollars to some lawyers who sued on behalf of some rando who had like 8 shares … literal corrupt bulls—.”
“Absolutely,” Musk wrote in response to Markus’ post.
“She is an activist posing as a judge,” the Tesla CEO said in another post.
“Shareholders should control company votes, not judges,” he added.
Musk also reposted the input of another user who wrote, “Things to do in Delaware: 1) Leave.”
Tesla shareholders originally approved the pay package, in the form of stock options, in 2018. But McCormick struck it down in January after a Tesla shareholder filed a lawsuit alleging that it was “beyond the bounds of reasonable judgment.”
Allison Robbert/Pool/AP
The shareholder, Richard Tornetta, also alleged that Tesla had provided “materially misleading” information to investors.
In her January ruling, McCormick called the process leading up to the approval of the package “deeply flawed,” writing that Musk “controlled Tesla,” had an unfair amount of power over the company’s board, and that investors weren’t fully informed about the terms of the package.
In arguing to get the 2018 package reinstated, Tesla’s lawyers pointed out that the company’s shareholders had voted to ratify it again in June, five months after McCormick’s initial ruling to void the package.
But the judge wrote in her Monday opinion that the argument was flawed and that Tesla’s lawyers “have no procedural ground for flipping the outcome of an adverse post-trial decision based on evidence they created after trial.”
She noted that “even if a stockholder vote could have a ratifying effect, it could not do so here.” McCormick added: “Were the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable.”
McCormick went on to write that “there were undoubtedly a range of healthy amounts that the Board could have decided to pay Musk. Instead, the Board capitulated to Musk’s terms and then failed to prove that those terms were entirely fair.”
Newsweek reached out to the communications teams of Tesla, X and SpaceX via email late Monday night for comment.
