PANews reported on December 3rd that according to X Daily News, a Delaware Court of Chancery judge once again rejected Tesla CEO Elon Musk's $55.8 billion compensation plan. The judge made the ruling based on the following three reasons:
A shareholder vote cannot retroactively validate a breach of fiduciary duty, particularly in transactions where there is a conflict of interest;
Tesla did not raise the ratification argument during trial and therefore it was procedurally ineffective;
The proxy materials used to solicit the vote were misleading and undermined the legitimacy of the vote.
Additionally, the court rejected Tesla’s attempt to use a shareholder vote as new evidence to overturn a prior ruling. The court stressed that post-trial evidence could not be used in this manner and that allowing such a strategy would undermine the deterrent effect of lawsuits designed to hold corporate leaders accountable for wrongdoing.
