Aug 12, 03:12 PM

Delaware High Court Sets Oct. 15 Hearing on Musk’s $56 B Tesla Pay Deal

The Delaware Supreme Court has scheduled an Oct. 15 hearing for Elon Musk and Tesla Inc.’s appeal of a lower-court decision that voided the chief executive’s 2018 compensation package, valued at about $56 billion. All five justices will sit for the oral arguments in Dover. Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery ruled in January that Tesla directors were conflicted and failed to fully inform investors before approving the record-setting pay deal. She later rejected Musk’s attempt to revive the plan through a second shareholder vote and awarded $345 million in legal fees to the attorneys for lead plaintiff Richard Tornetta. Musk, who has since relocated Tesla’s corporate domicile to Texas, contends the Chancery Court misapplied Delaware law and ignored the will of shareholders. The appeal also comes as Delaware lawmakers have enacted measures aimed at reassuring companies of the state’s business-friendly stance after the high-profile dispute. The case, In re Tesla Inc. Derivative Litigation, No. 534, 2024, will give the state’s highest court its first opportunity to opine on the new statutory changes and on the standards boards must meet when granting outsized executive pay packages.