Judge cancels Tesla’s R$277 billion payment to Elon Musk, considered the “largest in history”

The court accepted the argument of a Tesla shareholder and called the sum “immeasurable”

A judge in the state of Delaware, in the United States, has annulled the payment of 55.8 billion dollars (about R$ 277 billion, at current prices) by Tesla to its owner, businessman Elon Musk . The amount would refer to a 2018 agreement between the company and Musk and would be paid over ten years. The court accepted the argument of a shareholder of the company that produces electric cars and criticized the high cash value.

According to Judge Kathaleen McCormick’s decision, the amount is considered “unmeasurable” and would be unfair to shareholders if it were paid to Elon Musk. Tesla shares fell about 3% because of the case, and some investors took advantage of the ruling, hoping it would cause Tesla to overhaul its governance. This was reported by the international press agency Reuters.

On the social network Xthe old one Twitteracquired by Musk, complained about Delaware’s justice and asked followers to move Tesla’s headquarters.

“Never incorporate your business in the state of Delaware,” he said. “I recommend the Constitution [de empresas] in Nevada or Texas, if you prefer that shareholders make the decisions,” he added, opening a survey on the possibility of moving Tesla’s headquarters to Texas, where the company’s headquarters are physically located.

Payment

The Court’s decision to quash the largest payout in the history of US multinationals can still be appealed.

The judge concluded that the stock compensation was negotiated by directors who appeared to be indebted to Musk, currently ranked by Forbes magazine as the richest person in the world.

“Swept up by “all the benefits” rhetoric, or perhaps captivated by Musk’s allure as a superstar, the board never asked the $55.8 billion question: Was the plan really necessary for Tesla to retain Musk and achieve its goals? goals?” wrote Kathaleen McCormick of the Delaware Court.

The executives justified that the amount would allow Musk to continue dedicating himself to Tesla, since he has other businesses, such as SpaceX (which launches satellites into space) and Neuralink (which just implanted its first chip in a human) .

Highest payout recorded

According to BBC, the payout was the largest ever in American corporate history and helped make Musk the richest man in the world. The estimate is that his fortune is valued at 210.6 billion dollars (more than R $ 1 trillion), according to Forbes.

Elon Musk does not receive a salary, as his compensation is based on targets, such as Tesla’s stock price and profit.

Source: Terra

Rose

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