Business Maverick

Business Maverick

Tesla investors sound off to judge who voided Musk mega-pay plan

Tesla investors sound off to judge who voided Musk mega-pay plan
Tesla and X owner Elon Musk during a visit to the former German Nazi concentration camp Auschwitz II-Birkenau in Birkenau, Poland, 22 January 2024. (Photo: EPA-EFE/ZBIGNIEW MEISSNER POLAND OUT)

The judge who threw out Tesla Inc. co-founder Elon Musk’s record-setting $55.8-billion pay package said she’s received “many communications” from investors about the request from the winning lawyers for almost $6-billion in company stock. 

Delaware Chancery Court Chief Judge Kathaleen St. J. McCormick said she’s not reading the letters. The state judiciary’s ethics code “prohibits me from considering” the letters from non-parties in the litigation “who claim to hold stock in Tesla,” she wrote to lawyers on both sides. She asked the attorneys to recommend a process for handling the letters.

In January, McCormick concluded that the compensation plan — the largest ever given to a corporate executive in the US — was excessive and that Tesla’s directors were handcuffed by conflicts of interest when they approved it in 2018. The judge also faulted Tesla’s public disclosure about the pay package. 

This month, lawyers representing the investor who challenged the pay package, Richard Tornetta, submitted an unusual request to be paid their fees in stock — which they said would ease the burden on company shareholders.

That didn’t go over well with some investors, who launched a letter-writing campaign.

Shareholder Alexandra Merz urged fellow investors in a post on social media platform X to “send tens of thousands of letters” to McCormick and “describe in your own passionate words in a VERY RESPECTFUL MANNER” how there is no financial benefit from the judge’s ruling striking down the pay package that “could serve as the basis of calculation for plaintiff attorney fees”. 

“Elon Musk deserves the original compensation package in full,” reads another X post. “On top of that, I was surprised to learn that the lawyers who filed and ‘won’ this Class Action lawsuit demanded a roughly $5.9-billion compensation in Tesla shares, claiming it was to protect Tesla shareholders. Nothing could be further from the truth.”

Doing my part as a $TSLA shareholder#DelawareCourt81 #Tesla@TeslaBoomerMama @elonmusk

— Fabian Ebert (@Fabian10O) March 10, 2024

Greg Varallo, a lawyer for Tornetta, declined to comment. Evan Chesler, one of Musk’s attorneys, didn’t immediately respond after regular business hours to an email seeking comment.


Comments - Please in order to comment.

  • Deon Botha-Richards says:

    5.9 billion. For a short legal case. Wow. Some fee. Maybe the plaintive should just pay them. Oh wait there’s no settlement so where would the money come from…

Please peer review 3 community comments before your comment can be posted


This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.

Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Daily Maverick Elections Toolbox

Feeling powerless in politics?

Equip yourself with the tools you need for an informed decision this election. Get the Elections Toolbox with shareable party manifesto guide.