Delaware judge rules against Elon Musk's $50 billion bonus payout

A Delaware judge has nullified a $56 billion compensation package that Tesla awarded to its CEO, Elon Musk. On Monday, Chancellor Kathaleen St. Jude McCormick denied Musk's attorney's request to overturn a January ruling that had invalidated the compensation plan. The judge said that Musk had engineered the outsize pay package during negotiations while he controlled Tesla's board, the AP reported.

A Tesla shareholder's attorney argued that shareholders who had voted for the 10-year plan in 2018 had been provided with inaccurate and insufficient information in their lawsuit to halt the compensation package. In defense, Tesla's board members claimed that all of the issues the judge had mentioned in her January decision had been resolved because the shareholders who approved the pay plan for a second time in June had done so following complete disclosures. They contended that Musk was entitled to the compensation package since he had increased Tesla's market worth by billions of dollars. 

That argument was rejected by Judge McCormick. She concluded in her 103-page order that Tesla's attorneys lacked the legal authority to overturn her January decision "based on evidence they created after trial" under Delaware law. Tesla said Monday in an X post that the company would file an appeal with the Delaware Supreme Court.

"The ruling, if not overturned, means that judges and plaintiffs' lawyers run Delaware companies rather than their rightful owners - the shareholders," Tesla said.

Musk, the billionaire owner of SpaceX and Tesla, who was recently appointed by President-elect Donald Trump to lead the Department of Government Efficiency (DOGE), described the judge's decision as "lawfare" in a post on X, the social media site that he also owns.

"Shareholders should control company votes, not judges," he said.