The judge denied a request by attorneys for Musk and Tesla’s corporate directors to vacate her ruling earlier this year requiring the company to rescind the unprecedented pay package.
Chancellor Kathaleen St. Jude McCormick on Monday denied a request by attorneys for Musk and Tesla’s corporate directors to vacate her ruling earlier this year requiring the company to rescind the unprecedented pay package.
Defense attorneys then argued that the second vote makes clear that Tesla shareholders, with full knowledge of the flaws in the 2018 process that McCormick pointed out, were adamant that Musk is entitled to the pay package. They asked the judge to vacate her order directing Tesla to rescind the pay package.
The judge noted, among other things, that a stockholder vote standing alone cannot ratify a conflicted-controller transaction. While finding that the methodology used to calculate the fee request was sound, the judge noted that the Delaware’s Supreme Court has noted that fee award guidelines “must yield to the greater policy concern of preventing windfalls to counsel.”
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