Tencent Technology News, according to foreign media, Delaware, a judge Friday ruled that Tesla board must on CEO Eron.
When Tesla was approved by shareholders in March 2018, it estimated that Musk's compensation package for 2018 would be worth $2.6 billion, but stock analysts at that time said that if the company grew rapidly, the value of the compensation package could be as high as $70 billion. But the company has yet to announce its annual profits.
The bonus does not include the salary or cash dividend of Silicon Valley billionaire Musk, but it is based on Tesla's market value rising to $650 billion over the next 10 years.
Because of the way the board approved the compensation plan, Tesla asked to reject shareholder Richard
Therefore, the board must now defend the allegations that the company violated fiduciary duty when approving the plan, which unfairly enriched Tesla's CEO. The ruling opened the way for finding more details in the company's decision-making process.
Toneta had called for the abolition of the pay package and a comprehensive reform of Tesla's board of directors to better protect investors.
According to Judge Slitz, the ruling was directed at Tesla's compensation committee, which Tesla acknowledged was not independent of Musk. Slitz said he would dismiss the lawsuit if it was negotiated by truly independent directors and approved by a majority of shareholders unrelated to Musk.
Musk's compensation plan was approved by 73% of shareholders, excluding Musk and his brother Kimball. Voting results show that some, but not all, big investors are ready to support the pay package, although the company has been struggling to produce electric cars efficiently and profitably.
At that time, Institutional Shareholder Services, an agency consultancy, suggested voting against Musk's pay. The consulting firm pointed out that if Musk received the bonus, it would exceed any awards previously awarded to U.S. executives.
According to the agreement, Tesla's stock options are classified into 12 levels. Tesla's market value must be increased to $100 billion in order to get the first bonus payment, and an additional $50 billion in order to get the remaining payment.
Musk did not own most of Tesla's shares, but in another case, Slitz decided that Musk's influence on Tesla made him a de facto legal controller. As the company's controlling party, the board's decisions on its relationship with Musk will be subject to higher standards of legal supervision.
In addition, company shareholder Toneta said the plan was a waste of company assets, but the judge denied Toneta's claim. (Tencent Technological Revision/Yujia)