The court found that Musk had "engineered the landmark pay package in sham negotiations with directors who were not independent," leading to a deal that was unfair to shareholders, including those who were plaintiffs in the lawsuit.
"The board never asked the $55.8 billion question," the judge wrote. "Was the plan even necessary for Tesla to retain Musk and achieve its goals?" She called the deal "unfathomable," citing the following reasons:
Conflicts of interest: The court found that Musk improperly controlled the board process during the negotiation of the 2018 pay package, compromising the board’s independence.
Material misstatements: Tesla's proxy statement contained multiple material misstatements regarding the pay package vote, which the judge deemed misleading.
Excessiveness: The package, valued at $56 billion and now worth $101 billion, was deemed unreasonably excessive, even as compensation for meeting ambitious targets.