Tesla on Wednesday asked its shareholders to once again approve CEO Elon Musk‘s record-breaking $56bn pay that was set in 2018, but was rejected by a Delaware judge in January.
The compensation includes no salary or cash bonus, but sets rewards based on Tesla’s market value rising to as much as $650bn over the next 10 years. Tesla is now valued at over $500bn, according to LSEG data.
Musk’s pay was rejected by Kathaleen McCormick of Delaware’s court of chancery, who termed the compensation granted by the board as “an unfathomable sum” that was unfair to shareholders.
The January ruling, which can be appealed, had nullified the largest pay package in corporate America.
“We do not agree with what the Delaware Court decided, and we do not think that what the Delaware Court said is how corporate law should or does work,” the board chairperson, Robyn Denholm, wrote in a letter included in the regulatory filing.
Judge McCormick also oversaw Twitter’s July 2022 lawsuit against the entrepreneur when he tried to break his $44bn contract to buy the social media platform.
Musk’s compensation for 2023 was $0, the filing showed. The billionaire does not take a salary from the company and is compensated through stock options.
“If it is legally advisable, we suggest simply subjecting the original 2018 package to a new shareholder vote,” Tesla said in its filing.
The electric automaker also urged its investors in a regulatory filing to approve its decision to move the company’s state of incorporation from Delaware to Texas.
Shares of the world’s most valuable automaker were up 1% before the bell.