Elon Musk's $56 billion Tesla pay package struck down by judge

A Delaware judge canceled Elon Musk's $56 billion pay package at Tesla on Tuesday after a shareholder sued Musk alleging the approval process for the package was improper.

His 2018 compensation package gave the billionaire the right to acquire stock options as Tesla hit performance metrics — the loss of which would reduce Musk's net worth to $154.3 billion, according to Bloomberg Billionaires Indexand may force the world's richest man to relinquish his title for third place.

In a 201-page opinion, Delaware Chancery Court Chief Judge Kathaleen St.

“Cleansed of its upside-down rhetoric or perhaps starry-eyed by Musk's superstar appeal, the board never asked the $55.8 billion question: Was the plan still necessary for Tesla to keep Musk and achieve its goals?' Chief Justice Kathaleen St.

McCormick also agreed with Tornetta's claim that Musk “controlled Tesla” and said the process that led to the board approving his compensation was “deeply flawed.” The CEO had “extensive ties to the people charged with negotiating on Tesla's behalf,” the judge wrote, including “members of management who were beholden to Musk” — such as general counsel Todd Maron, the “former divorce attorney” by Musk.

The electric car company's share price fell about 3 percent in after-hours trading, according to Bloomberg.

“The parties must draft a form of final order to implement this decision and submit a joint letter identifying all issues, including fees, that must be addressed to conclude this matter,” McCormick wrote.

More than five years after Tesla's co-founder was awarded the “largest compensation plan ever,” Tuesday's decision means the electric car company's board will have to start from scratch and offer a new proposal.

Following the ruling, Musk took to social media platform X (formerly Twitter) to lament the judge's decision. “Never incorporate your company in the state of Delaware,” Tesla's CEO wrote.