The next hearings for Tesla‘s CEO Elon Musk’s pay package case are set for October 15 in Dover, Delaware, according to a Bloomberg report.
The company is challenging a decision by the Delaware Chancery Court, which in December rejected Tesla’s attempt to bring back the CEO’s $56 billion compensation plan by holding a second shareholder vote.
The case is currently under appeal at the Delaware Supreme Court.
According to Chancellor Kathaleen St. J. McCormick, the Board’s plan was tainted by conflicts of interest and lack of transparency with shareholders.
McCormick considered the pay package to represent an “an unfathomable sum” that was unfair to other shareholders.
The judge also ordered Tesla to pay $345 million in legal fees to the lawyers representing Richard Tornetta, the investor who filed the lawsuit, opposing to the Board’s claim that the second shareholder vote had approved Musk’s pay package.
The case has been in court for over six years. Last year, following McCormick’s decision, Tesla moved its legal headquarters from Delaware to Texas.
The company had already moved its corporate headquarters to the Southern state from California, criticizing the latter’s tighter regulation.
Last week, the Board of Directors said on a shareholder letter that it has granted a $29 billion stock award to Elon Musk, highlighting that it is still awaiting for the Delaware court decision.
“Delaware litigation continues to loom over us after seven years,” the shareholder letter stated.
The Board argued that Musk’s leadership has been pivotal to the brand’s transformation and value creation, noting that the 2018 award corresponded to a $2.3 billion compensation charge and $735 billion increase in Tesla’s market capitalization.
The company further clarified that “to put it simply, there cannot be any ‘double dip'” and Elon Musk “will not be able to keep this new award in addition to the options he will be awarded under the 2018 CEO Performance Award should the courts rule in our favor.”
The special committee that approved the award said they are “confident” that it “will incentivize Elon to remain at Tesla and focus his unmatched leadership abilities on further creating shareholder value.”
This follows criticism from several shareholders and analysts regarding Elon Musk’s involvement in US politics, from the beginning of the year.
Last month, Wedbush analyst and Tesla bull Dan Ives told the Board of Directors to give the CEO Elon Musk 25% voting control with “oversight on political endeavours” and controlled time allocation to the EV maker, to which Musk responded with “shut up, Dan.”
