Well, right after Elon clinched a massive “W” with his JPMorgan lawsuit, he was suddenly met with a big fat “no” by  Delaware’s Court of Chancery. In short,  Judge Kathaleen McCormick doubled down on her January ruling that his absurd, reality-defying $56 billion pay package isn’t just excessive—it’s a straight-up insult to corporate governance. Tesla’s Hail Mary attempt to revive the deal through a shareholder vote in June? Dead on arrival.

(Source: Giphy) 

Of course, Elon nor Tesla is taking the L quietly. The company immediately hopped on X (formerly Twitter) to declare, “The ruling is wrong, and we’re going to appeal.” Because why not stretch this legal dumpster fire into yet another year of courtroom drama? The persistence is admiral. 

But how did this all come about? Well let’s rewind back to 2018, hen Tesla’s board handed Musk a pay deal so bloated it made Wall Street veterans choke on their martinis. The pitch? Musk wouldn’t take a dime in salary but instead rake in 303 million stock options—worth 1% of Tesla—every time the company hit certain performance milestones. It was sold as a genius, performance-based package. But the reality was  Judge McCormick called it out for what it was: a board so spineless they let Musk “negotiate against himself.” Translation: They gave him whatever the hell he wanted. 

(Source: CNBC) 

Now fast forward to January of 2023,  and McCormick slammed the brakes on the package, branding it “unfair to shareholders” and calling out Tesla’s board for being Musk’s personal cheerleaders instead of independent fiduciaries. Monday’s ruling? Same energy. McCormick wasn’t swayed by Tesla’s argument that the June shareholder vote—where 84% of non-Musk voters backed the package—somehow wiped the slate clean.

Tesla’s defense boiled down to “the shareholders said yes, so it must be fine.” McCormick wasn’t having it. In her 101-page ruling, she ripped apart Tesla’s argument, pointing out that you can’t slap a coat of paint on a rotting house and call it fixed. She accused Tesla of misleading shareholders about how “easy” it would be to hit the milestones tied to Musk’s payday and made it clear the board was too cozy with the guy to act in anyone’s best interest but his. 

(Source: Giphy) 

Her biggest slap in da face? “Were the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable.” Translation: Nice try, but you don’t get to rewrite reality because you can catch rockets falling out of midair LOL. 

Unsurprisingly, Tesla and Musk are gearing up for an appeal to the Delaware Supreme Court, hoping for a more “pragmatic” (read: Musk-friendly) outcome. But let’s be real—pissing matches like this drag on. Like draaaag on. So don't expect any nail in the coffin actions until late 2025 at least. 

(Source: Reuters) 

Meanwhile, when it comes to Tesla's stock, it dipped 1.4% in after-hours trading because, apparently, even Musk’s fanboys are getting tired of the circus. Speaking of fanboys, Omar Qazi, one of Musk’s loudest cheerleaders on X, moaned that “the voice of shareholders is being overruled.” But again, according to the Delaware Court, Elon and his fanboys can kick rocks for the time being. 

In the end though, this isn’t just about Musk’s ridiculous $56 billion payout (which has now ballooned to an eye-watering $101 billion, thanks to Tesla’s stock). It’s about Tesla’s governance—or lack thereof. McCormick didn’t sugarcoat it: Tesla’s board is basically Musk’s fan club, and their inability to act independently is a flashing red warning light for any serious investor. Sure, Musk’s cult of personality might keep the Tesla engine running, but courts aren’t here to enforce corporate groupies’ fantasies.

(Source: Giphy) 

Oh and let’s not forget the cherry on top of this clusterf**k sundae: Tesla now owes $345 million in legal fees to the lawyers who dragged this case into the spotlight. That’s a far cry from the insane $5.6 billion they originally wanted, but it’s still one of the largest fee awards in securities litigation history.

For now, Musk will just have to keep running Tesla, SpaceX, Neuralink, and the rest of his empire without that mind-blowing payday. Not that he cares—when you’re sitting on a net worth north of $250 billion, $56 billion is pocket change. Musk probably spends more on flamethrowers and meme-based Twitter polls than most people will earn in a lifetime.

But still, this ruling sends a clear message. Even if you’re the richest guy on the planet, Delaware’s court doesn’t give a damn. Musk might think he’s above it all, but McCormick just reminded him—and everyone else—that, occasionally, the rules do apply. Good for them. Now let’s go after someone way more manipulative and deceiving shall we? 

As always, stay safe and stay frosty, friends! Until next time… 

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Stocks.News holds positions in Tesla as mentioned in the article.