Tesla CEO’s $56 billion compensation package was unfair, Delaware court rules

The Delaware Chancery Court ruled Tuesday that a compensation package for Tesla CEO Elon Musk worth almost $56 billion is not fair and must be voided.

The decision comes nearly a year after the attorney for a Tesla shareholder brought the issue to the Delaware court, arguing that the payment plan was a “conflicted-controller transaction” because of Musk’s role as both CEO and majority shareholder.

To keep the almost $56 billion, Musk had to show over the course of the five-day trial that the payment plan — the “largest potential compensation opportunity ever observed in public markets,” according to court documents — was fair and that the stockholder vote to approve it was “fully informed.”

But it was not enough to convince the judge.

Instead, the court found that the proxy statement, an informational document given to shareholders ahead of meetings, described things inaccurately and “misleadingly omitted details about the process,” making the decision unfair.

BACKGROUND: Elon Musk’s Tesla pay package, possibly worth $55 billion, under scrutiny in Delaware court

This article originally appeared on Delaware News Journal: Elon Musk’s Tesla payout plan was unfair, Delaware court voids