A Delaware judge has cleared the path for Elon Musk and Tesla to challenge a recent ruling that struck down the CEO’s landmark $56 billion pay deal. In a Friday decision, Chancellor Kathaleen McCormick of the Court of Chancery allowed the 30-day clock to begin ticking for an appeal to the Delaware Supreme Court.
Musk, along with Tesla’s board, can now contest McCormick’s earlier verdict that their approval of the pay package violated fiduciary duties to investors. The judge had criticized the pay plan as “unfathomable” due to its staggering scale. Tesla shareholders had backed the compensation in a June vote, but McCormick stood firm in January, rejecting requests to revisit her ruling.
The legal struggle also includes an additional challenge: Tesla must now consider an order to pay $345 million in attorney fees to the lawyers who represented Richard Tornetta, a shareholder who filed the lawsuit back in 2018.
The Delaware Supreme Court, which may take up to a year to issue a decision, holds the next chapter in this high-stakes legal saga.
