Musk Pay Plan Judge to Hold Hearing on Tesla Shareholder Vote

Elon Musk

(Bloomberg) -- The judge who scrapped Elon Musk’s $56 billion Tesla Inc. pay package will hold a hearing on whether a recent shareholders’ vote to revive the deal should affect her decision.

Delaware Chancery Court Judge Kathaleen St. J. McCormick has no legal obligation to recognize the results of the June 13 vote, but she can choose to take judicial notice of the development. She said Thursday she would hear arguments on whether she should in late July or early August.

If McCormick does take judicial notice of the vote, she could theoretically rescind her Jan. 31 decision finding that the board that approved Musk’s compensation was “beholden” to the billionaire and not looking after shareholders’ interests. Tesla has argued that the vote addresses many of the concerns McCormick raised in her decision.

At the very least, the ruling will further delay the six-year-old case. McCormick has to issue a final ruling before Musk can appeal it to the Delaware Supreme Court.

The judge said on Thursday, however, that she won’t delay an already scheduled July 8 hearing on the attorney’s fees being sought by the lawyers who brought the challenge to Musk’s pay package. But she said that they should reserve arguments relating to the shareholder vote for the later hearing.

John Reed, one of Tesla’s lawyers, didn’t immediately return an email seeking comment. Greg Varallo, a lawyer for the objecting shareholder, declined to comment.

The case is Tornetta v. Musk, 2018-0408, Delaware Chancery Court (Wilmington)

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