Tesla CEO Elon Musk is challenging a Delaware judge’s ruling ordering the company to pay $345 million in legal fees in a shareholder lawsuit. The ruling, made by Chancellor Kathaleen St. Jude McCormick, followed her decision to overturn Musk’s compensation package, which had been approved twice by Tesla shareholders.
McCormick ruled that shareholders did not have sufficient information when voting on the package and questioned the independence of Tesla’s board. Despite 77% of shareholders supporting the package, McCormick sided with a single shareholder holding just nine shares and awarded $345 million to the plaintiff’s attorneys, citing the complexity of the case.
Tesla called the decision “wrong” and announced plans to appeal. “A Delaware judge just overturned a supermajority of shareholders who own Tesla and who voted twice to pay @elonmusk what he’s worth,” Tesla stated on X.
The ruling has drawn attention to McCormick’s ties to President Joe Biden. Critics note her previous employment at Young Conaway, a law firm that donated to Biden’s campaigns, and emails suggesting the Biden family’s influence over Delaware judicial appointments.
This case is the latest in a series of challenges Musk has faced from the Biden administration. Musk’s companies, including SpaceX, have been targeted by the Department of Justice and FCC, raising concerns that the legal pressure is politically motivated.
Musk’s appeal will focus on defending shareholder rights and challenging the exorbitant legal fees awarded by the court. Tesla’s leadership has framed the ruling as an attempt to undermine the company’s autonomy and its shareholders’ decisions.
