Tesla CEO Elon Musk's record 2018 pay deal was rejected again by a Delaware judge, even though shareholders again backed the massive compensation deal in June. Tesla stock edged lower early Tuesday.
Delaware Court of Chancery Judge Kathaleen McCormick, in a late Monday decision, stuck with her January decision that Tesla's board was too heavily influenced by Elon Musk when awarding the original pay deal in 2018. At the time of the January ruling, the pay deal was worth some $56 billion. As of Monday's close, it was worth $101.5 billion.
In June, some 77% of shareholders voting approved the Musk pay deal, or 72% excluding Musk and his brother, Kimbal Musk. Some 63% backed reincorporating Tesla in Texas, from Delaware.
Before the June shareholder vote, Musk had suggested he might shift Tesla resources to his privately held xAI if he didn't get the pay deal, as well as further power giving him a 25% voting stake.
Judge Kathaleen McCormick wrote in Monday's opinion that, "Even if a stockholder vote could have a ratifying effect, it could not do so here."
Tesla will likely appeal the ruling to the Delaware Supreme Court.
The company could award a new pay package, but with shares valued far more than in 2018, a similar compensation payout would be far more expensive for the EV giant. Back in 2018, the pay deal only was worth some $2.6 billion.
Strictly speaking, rejection of Musk's pay deal means that there's less dilution for other shareholders.
Other Tesla News
Tesla China sales in November, including exports, rose 15.5% vs. October but fell 4.3% vs. a year earlier to 78,856. Local sales appear strong, with last week's EV registrations the second highest ever. A new end-of-year Model Y discount, on top of 0% financing, is fueling demand.
Meanwhile, Tesla told workers on the Cybertruck production line that there was e no 'need to report to work' for the next three days starting Tuesday. That's according to Business Insider, citing a company memo out Monday.
Tesla Stock
TSLA stock fell 0.9% in premarket trading.
Shares rose 3.5% to 357.09 on Monday, a two-year closing high.
Tesla began rolling out Full Self-Driving v13 to select outside customers. Two analysts raised price targets on TSLA stock, with FSD optimism a key factor.
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