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Chancellor Kathaleen McCormick, the Delaware judge who nullified Musk’s $56 billion pay package, said that she is assured Tesla Inc. (NASDAQ:TSLA) will not challenge the ruling on CEO Elon Musk’s pay package in any other jurisdiction.
What Happened: This assurance came after the shareholder legal team, who had sued over Musk’s hefty pay package, sought orders to prevent their case from being overturned in a Texas court, Reuters reported on Wednesday.
“If I have interpreted the defendants' position incorrectly, then defense counsel – as officers of the court – are duty-bound to correct it. In the meantime, the defendants' statements give me great comfort,” McCormick said in her seven-page letter.
Tesla shareholders are set to vote next month to “ratify” the pay package that McCormick voided and to reincorporate Tesla in Texas. The shareholder’s legal team had previously speculated in a court filing in April that Tesla and Musk might try to reverse McCormick’s ruling in another jurisdiction, such as Texas.
See Also: SpaceX CEO Elon Musk Says Gigantic Starship To Get Even Taller With 3x More Thrust Than Saturn V
Tesla, however, dismissed these speculations as “rank speculation” in court documents, stating that Delaware would retain jurisdiction over the pay dispute. McCormick interpreted these comments as an assurance that Tesla would not attempt to circumvent her previous ruling.
McCormick must now decide if the shareholder’s legal team should receive the $6 billion they requested from Tesla as a legal fee before Musk and Tesla can appeal. A hearing for the legal fee has been scheduled for July 8.
Why It Matters: This development follows a series of events that began in January when McCormick voided Musk’s $55 billion compensation plan.
In March, Musk thanked Tesla shareholders who wrote to the Delaware court against voiding his pay package. However, in May, Glass Lewis advised shareholders to vote against Musk’s proposed compensation package.
Price Action: On Tuesday, Tesla’s stock closed at 176.75, down 1.39% from the previous close, according to Benzinga Pro.
Read Next: Glass Lewis Tells Shareholders To Vote Against Elon Musk’s Proposed $56 Billion Compensation Package
Image via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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