Failing upwards poster boy, disgusting hoarder of wealth, and Tesla/Space X/Twitter CEO Elon Musk is dealing with a legal loss that’s gonna cost him $56 billion and it’s all thanks to former Dawn of Correction drummer Richard Tornetta.
We reported on this case back in November 2022, but the basic gist is that Musk received a massive $56 billion pay package from Tesla. At the time it was granted to Musk for alleged performance goals he met. Tornetta, however, contested that in court. His claim was that the board was not acting in good faith, but rather as a rubber stamp for whatever Musk wanted. As a result, Tornetta complained that their granting his huge pay bonus was a failure of their fiduciary responsibilities to shareholders. And with just nine shares in the company, that made the musician one of those shareholders.
Since Tesla was incorporated in Delaware, the case was filed in Delaware Supreme Court. Earlier this week, Chancery Court Chancellor Kathaleen McCormick ruled in favor of Tornetta. According to CNBC, the court decided that Musk had “extensive ties” within the board that heavily influenced its decision in granting that huge compensation package. McCormick laid it all out in her decision.
“Put simply, neither the Compensation Committee nor the Board acted in the best interests of the Company when negotiating Musk’s compensation plan. In fact, there is barely any evidence of negotiations at all. Rather than negotiate against Musk with the mindset of a third party, the Compensation Committee worked alongside him, almost as an advisory body.”
In response to the ruling, Musk urged other hyper rich CEOs to “never incorporate your company in the state of Delaware.” He also suggested that he would move the company’s incorporation to Texas, which is where Tesla is headquartered.
Tornetta’s lawyer, Greg Varallo, said in a statement that his client was happy with the court’s ruling.
“We are enormously grateful for the Court’s thorough and extraordinarily well-reasoned decision in turning back the Tesla board’s absurdly outsized pay package for Musk.
“The Court’s hard work will redound directly to the benefit of Tesla investors, who will see the dilution from this gargantuan pay package erased.”
So there ya go. A thrash drummer and Tesla shareholder cost Musk billions.
But let’s be real here — though this sort of legal blow would normally cripple a person’s financial situation, Elon’s the richest man on the planet. This is probably like if you or I lost $5.
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