Judge shuts down Tesla’s attempt to reinstate Elon Musk’s giant CEO pay package
The judge ruling over Elon Musk’s ~$55 billion CEO pay package, which some Tesla shareholders claimed was obtained without following proper governance rules, has decided to reject Tesla’s attempt to reinstate it with a shareholder vote.
Delaware Supreme Court could be next.
In 2018, Tesla shareholders voted for Elon Musk to get a historic new CEO compensation package that could be worth $55 billion for the executive if Tesla achieved remarkable growth in valuation and profits, which it did.
However, some shareholders argued that Musk unfairly secured this extremely generous compensation plan by misleading shareholders about the fact that the plan was being put together by an independent board and negotiated in good faith.
They filed a complaint in court in Delaware. The case went to trial in 2022, but it took a long time for the judge to give her decision.
Earlier this year, Delaware Chancery Court Chief Judge Kathleen St. J. McCormick sided with the shareholders after testimonies from everyone involved in the pay package negotiations, or lack of negotiations, and a thorough investigation of how it came about.
She determined that Musk was in control of the board during the time it granted him the pay package while the board members who approved the package were also granted historically large compensations, which they ended up partly reimbursing as part of a settlement from a separate lawsuit for excessive compensation.
McCormick found many governance irregularities, including the fact that the board members who supposedly negotiated the package were not independent of Musk, and even his personal lead on the compensation was his own divorce lawyer, who he had recently hired to be general counsel at Tesla.
The judge rescinded the compensation package, which included over $50 billion worth of Tesla stock options that the CEO had yet to exercise. She asked Tesla to go back to the drawing board, renegotiate the pay package in good faith, and present it properly to shareholders.
Instead, Tesla disagreed with the judge’s findings around governance issues and decided to present the same package while including the judge’s decision in the updated proposal and having Tesla’s shareholders vote on it again.
In June, Tesla shareholders voted to reapprove the package, albeit at a lower percentage than the original vote.
Tesla’s legal team believed the vote would “ratify” the compensation package and force the judge to vacate her decision to void the pay package. However, both Tesla’s lawyers and most corporate law scholars agreed that this would require a completely new way to address ratification.
McCormick listened to both sides this August, and we were awaiting her decision by the end of the year.
Today, the judge released her decision and she sided against Tesla’s argument again:
“The large and talented group of defense firms got creative with the ratification argument, but their unprecedented theories go against multiple strains of settled law.”
Beyond the ratification problem, the judge also said that she believes Tesla again misrepresented the situation to shareholders in the statements made around the new vote:
“Even if a stockholder vote could have a ratifying effect, it could not do so here due to multiple, material misstatements in the proxy statement.”
On top of her ruling on the compensation, she also ruled against the lawyers for the shareholders, who were asking for a ridiculous $5 billion in Tesla stock as their legal fee. Instead, she awarded them $345 million.
Tesla is likely to contest the ruling, which could move the case to the Delaware Supreme Court.
Electrek’s Take
As I wrote last summer, Elon Musk’s compensation package case will haunt Tesla for years. Even if you believe Musk deserves this package, Tesla’s approach to reinstating it was boneheaded and didn’t follow the law as I, and seemingly the judge and most Delaware corporate law experts, understand it.
Tesla, and more specifically Elon Musk, it’s hard to differentiate the two lately, which is part of the problem, are showing no intention to address their governance issues.
Let’s be clear: Elon could get paid somewhat easily here. Even as much or close to this amount. However, it needs to do it through the proper governance and respect the process.
Instead, Elon prefers to lie to shareholders and present the situation as politically motivated lawfare. It’s nonsense.
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Twitter CEO Jack Dorsey testifies during a remote video hearing held by subcommittees of the U.S. House of Representatives Energy and Commerce Committee on “Social Media’s Role in Promoting Extremism and Misinformation” in Washington, U.S., March 25, 2021.
Handout | Via Reuters
Block jumped more than 5% on Monday, leading a rally in shares of fintech companies as analysts downplayed the threat of JPMorgan Chase’s reported plan to charge data aggregators for access to customer financial information.
The recovery followed steep declines on Friday, after Bloomberg reported that JPMorgan had circulated pricing sheets outlining potential fees for aggregators like Plaid and Yodlee, which connect fintech platforms to users’ bank data.
In a note to clients on Monday, Evercore ISI analysts said the potential new expenses were “far from a ‘business model-breaking’ cost increase.”
In addition to Block’s rise, PayPal climbed 3.5% on Monday after sliding Friday. Robinhood and Shift4 recorded modest gains.
Broader market momentum helped fuel some of the rebound. The Nasdaq closed at a record, and crypto rallied, with bitcoin climbing past $123,000. Ether, solana, and other altcoins also gained.
Evercore ISI’s analysts said that even if JPMorgan’s changes were implemented, the most immediate effect would be a slight bump in the cost of one-time account setups — perhaps 50 to 60 cents.
Morgan Stanley echoed that view, writing that any impact would be “negligible,” especially for large fintechs that rely more on debit, credit, or stored balances than bank account pulls for transactions.
PayPal doesn’t anticipate much short-term impact, according to a person with knowledge of the issue. The person, who asked not to be named in order to speak about private financial matters, noted that PayPal relies on aggregators primarily for account verification and already has long-term pricing contracts in place.
While smaller fintechs that depend heavily on automated clearing house (ACH) rails or Open Banking frameworks for onboarding and compliance may face real pressure if the fees take effect, analysts said the larger platforms are largely insulated.
WATCH: Congress moves to redraw $3.7 trillion crypto market rules, opening door to Wall Street
The global EV market is still charging ahead. According to new numbers from global research firm Rho Motion, 9.1 million EVs were sold worldwide in the first half of 2025, up 28% compared to the same period last year. But not every region is accelerating at the same pace.
China and Europe are doing the heavy lifting
More than half of the world’s EVs this year have been bought in China. That market hit 5.5 million sales in the first six months of 2025 – a 32% jump year-over-year. Around half of new cars bought in China are now electric.
While some Chinese cities’ subsidies have dried up, Rho Motion expects momentum to pick back up later in the year as more funding is released.
In Europe, 2 million EVs were sold in the first half of the year, up 26%. Battery electric vehicle (BEV) sales also rose 26%, thanks in part to affordable models like the Renault 4 (pictured) and 5 entering the market. Plug-in hybrids (PHEVs) weren’t far behind, growing 27% year-to-date. Chinese automakers are leaning into PHEVs as a way to work around the EU’s new tariffs on BEVs.
Spain is leading the pack with EV sales soaring 85% so far this year. Its generous MOVES III incentive program was extended in April and has kept sales strong. The UK and Germany are also seeing solid growth – 32% and 40%, respectively. France, however, is slumping. With subsidies cut, EV sales there have dropped 13%.
North America is stuck in the slow lane
Things aren’t looking quite as bright in North America. EV sales in the US, Canada, and Mexico are up just 3% so far this year.
Mexico is the one bright spot, with a 20% boost. The US is up 6%. But Canada is down a whopping 23%.
And things could get bumpier. On July 4, Trump signed Congress’s big bill into law, which axes all the Inflation Reduction Act EV tax credits. Those consumer credits for EVs now officially end on September 30.
Just over half of the EVs sold in the US this year qualified for those credits. Rho Motion predicts a rush in Q3 before the subsidies disappear – and a decline in sales after that.
Rho Motion data manager Charles Lester said, “With Trump’s latest cuts in his ‘Big Beautiful Bill,’ the US could struggle to see any growth in the EV market overall in 2025.”
Global EV sales snapshot, H1 2025 vs H1 2024
- Global: 9.1 million (+28%)
- China: 5.5 million (+32%)
- Europe: 2.0 million (+26%)
- North America: 0.9 million (+3%)
- Rest of world: 0.7 million (+40%)
Read more: China breaks records as global EV sales hit 7.2 million in 2025
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Lucid’s electric sedan can drive further, charge faster, and packs more advanced tech than most of the competition. That might explain why it’s leading the segment. The Lucid Air remained the best-selling luxury EV sedan in the US after widening its lead in the Q2.
The Lucid Air is America’s best-selling luxury EV sedan
The 2025 Lucid Air Pure arrived as the “World’s most efficient car” with an EPA-estimated range of 420 miles and a record 146 MPGe.
It just set a new Guinness World Record last week for the longest journey by an electric car after travelling 749 miles (1,205 km) on a single charge.
That record was set in the range-topping Lucid Air Grand Touring model, which is rated for up to 512 miles of EPA-estimated range. On the WLTP scale, it’s rated at 597 miles (960 km). Either way, it still crushed the estimates.
According to second-quarter sales data, released by Kelley Blue Book on Monday, the Lucid Air is still America’s best-selling luxury EV.
Lucid sold 2,630 Air models in Q2, up 10% from the previous year. Through the first half of 2025, Lucid Air sales are up 17% with 5,094 units sold.
Tesla, on the other hand, only sold 1,435 Model Ss during the quarter, 71% fewer than it did in Q2 2024. Tesla Model S sales in the US are down 70% through the first half of the year at 2,715.
Although Porsche Taycan sales were up 32% with 1,064 models sold, the significantly upgraded 2025 model year was expected to see even more demand. Porsche has 2,083 Taycans in the US this year, up just 1% from 2024.
Other luxury EV sedans, such as the BMW i5 (1,434), i7 (820), and the Mercedes EQS (498), experienced steep double-digit sales declines year-over-year.
And it’s not just electric luxury sedans. The Lucid Air is currently outselling many gas-powered vehicles in its segment.
Lucid’s first electric SUV, the Gravity, is also rolling out. Although only five were sold in the second quarter, Lucid is quickly scaling production. Lucid aims to produce 20,000 vehicles this year, more than double the roughly 9,000 it built in 2024.
Earlier today, Lucid’s interim CEO, Marc Winterhoff, confirmed during an interview with Bloomberg that the company expects higher Gravity output in the second half of the year.
The interview was at the grand opening of Panasonic’s new battery cell plant in De Soto, Kansas. Winterhoff said Lucid will start using new cells from the facility, but not until next year.
Lucid’s CEO stressed the importance of establishing a local supply chain, as policy changes under the Trump Administration are taking effect. Lucid and Panasonic are collaborating to localize EV materials, such as graphite. Last month, Lucid secured a multi-year supply agreement with Graphite One for US-sourced Graphite.
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