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Decide voids Elon Musk compensation in lawsuit

Elon Musk — the CEO of Tesla and SpaceX and proprietor of X, previously Twitter — speaks through the New York Occasions annual DealBook summit in New York Metropolis, Nov. 29, 2023.

Michael M. Santiago | Getty Photographs

A Delaware decide on Tuesday voided the $56 billion pay package deal of Tesla CEO Elon Musk, ruling that the corporate’s board of administrators “failed that the compensation plan was honest.”

Tesla’s share worth slid about 3% in after-hours buying and selling Tuesday following information of the choice within the lawsuit filed by Richard Tornetta, a shareholder within the electrical automaker.

“The plaintiff is entitled to rescission,” Delaware Chancery Courtroom Decide Kathaleen McCormick wrote in her ruling agreeing that Musk’s pay package deal was inappropriately set by Tesla’s board.

“The events are to confer on a type of last order implementing this resolution and submit a joint letter figuring out all points, together with charges that have to be addressed to carry this matter to a conclusion on the trial stage,” McCormick mentioned.

The 2018 CEO pay package deal that Tesla granted Musk was unparalleled in company compensation plan in historical past, and made the Tesla and SpaceX boss a centi-billionaire and the richest individual on the planet.

CNBC has requested remark from Musk, his lawyer and Tornetta’s lawyer.

In a tweet late Tuesday afternoon, Musk wrote, “By no means incorporate your organization within the state of Delaware.”

– Extra reporting by CNBC’s Lora Kolodny

That is breaking information. Please examine again for updates.

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