Chancellor McCormick's ruling against Elon Musk's compensation package has been deemed excessive and improperly influenced by Musk himself.
This is the second time the pay plan has been invalidated by McCormick, who emphasized that the board failed to act independently and capitulated to Musk's demands.
The compensation plan allowed Musk to purchase shares at prices significantly below market value, with an estimated worth of up to $56 billion.
Richard Tornetta, a Tesla shareholder, filed a lawsuit claiming the package was excessive and a waste of corporate assets.
The ruling highlights the tension between executive compensation and shareholder rights, as well as the need for corporate governance that prioritizes the interests of all investors.
Tesla's board plans to appeal the decision to the Delaware Supreme Court.
The court also addressed the issue of attorney fees sought by Tornetta's legal team, ultimately awarding $345 million instead of the requested $5.6 billion.
The outcome of this legal battle will have implications for Tesla and the broader corporate governance landscape.