Tesla has vowed to press on with its fight to restore Elon Musk’s historic pay package, and failure could have a high cost: the potential for more than $100bn in tax and accounting charges for the company and its chief executive.
Delaware judge Kathaleen McCormick recently denied the electric vehicle maker’s second attempt to give Musk the largest package of stock options in history — worth $56bn at the time of the original ruling and more than $129bn at the current share price. She found that shareholders’ overwhelming vote to reapprove the grant did not override her previous rejection of the 2018 deal as unfair and awarded by a board in thrall to its CEO.
Her stance has left the board with a dilemma: pursue a lengthy and uncertain appeal with Delaware’s Supreme Court or award its chief executive with a new options package.