A Delaware judge ruled on Monday that Tesla CEO Elon Musk still is not entitled to receive a $56 billion compensation package despite shareholders of the electric vehicle company voting to reinstate it.
The ruling by the judge, Chancellor Kathaleen McCormick of the Court of Chancery, follows her January decision that called the pay package excessive and rescinded it, surprising investors, and cast uncertainty over Musk’s future at the world’s most valuable carmaker.
Musk did not immediately respond to an emailed request for comment.
Tesla has said in court filings that the judge should recognize a subsequent June vote by its shareholdersin favor of the pay packageforMusk, the company’s driving force who is responsible for many of its advances, and reinstate his compensation.
McCormick said Teslas board was not entitled to hit reset to restore Musks pay package.
Were the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable, she said in her 101-page opinion.
She also said Tesla made multiple material misstatements in its proxy statement regarding the vote, and could not claim the vote was a cure-all to justify restoring Musks pay.
Taken together, the problems with Teslas arguments pack a powerful punch, she wrote.
Tesla shares fell 1.4% in after hours trade, after the ruling.
McCormick also ordered Tesla to pay the attorneys who brought the case $345 million, well short of the $6 billion they initially requested. She said the fee could be paid in cash or Tesla stock.
We are pleased with Chancellor McCormicks ruling, which declined Teslas invitation to inject continued uncertainty into Court proceedings,” said a statement from Bernstein Litowitz Berger & Grossmann, one of the three law firms for the plaintiff.
The law firm also said it looked forward to defending the court’s opinion if Musk and Tesla appealed.
Musk and Tesla can appeal to the Delaware Supreme Court as soon as McCormick enters a final order, which could come as soon as this week. The appeal could take a year to play out.
After the January ruling, Tesla shareholders flooded the court with thousands of letters arguing that rescinding Musk’s pay increased the possibility he would leave Tesla or develop some products like artificial intelligence at ventures other than Tesla.
Attorneys for shareholder Richard Tornetta, who sued in 2018 to challenge Musk’s compensation package, had argued that Delaware law does not permit a company to use a ratification vote to essentially overturn the ruling from a trial.
McCormick in January found that Musk improperly controlled the 2018 board process to negotiate the pay package. The board had said that Musk deserved the package because he hit all the ambitious targets on market value, revenue and profitability.
But the judge criticized Tesla’s board as “beholden” to Musk, saying the compensation plan was proposed by a board whose members had conflicts of interest due to close personal and financial ties to him.
After the January ruling, Musk criticized the judge on his social media platform X and encouraged other companies to follow the lead of Tesla and reincorporate in Texas from Delaware, although it is unclear if any companies did so.
The judge in her January ruling called the pay package the “biggest compensation plan ever – an unfathomable sum.” It was 33 times larger than the next biggest executive compensation package, which wasMusk’s 2012 pay plan.
As of Monday, the pay package was worth $101.4 billion, according to Equilar, a compensation consulting firm.
Musk’s 2018 pay package gave him stock grants worth around 1% of Tesla’s equity each time the company achieved one of 12 tranches of escalating operational and financial goals.
Musk did not receive any guaranteed salary. Tornetta argued that shareholders were not told how easily the goals would be achieved when they voted on the package.
A major incident had been declared in Shropshire after a sinkhole breached a canal in the Chemistry area of Whitchurch.
Fire Control received reports at 4.22am that a canal bank had collapsed with large volumes of water escaping into the surrounding land.
Firefighters had to use barge boards and water gates to mitigate water flow to establish upstream and downstream safety sectors.
Image: Pic: Shropshire Fire and Rescue Service
Image: Sinkhole in Shropshire
Three narrowboats have been affected by the incident, with at least two swallowed by the sinkhole, which is approximately 50m by 50m in size.
There are currently no reports of any casualties, but around a dozen residents have been evacuated from nearby moored boats and are being relocated to a welfare centre at the former Whitchurch Police Station.
An area of land next to the canal has been flooded as a result of the breach.
Emergency services are currently on the scene, and a multi-agency response has been set up, co-ordinated through the Shropshire Tactical Co-ordination Group (TCG).
More on Shropshire
Related Topics:
Image: Pic: Shropshire Fire and Rescue Service
Image: Sinkhole in Shropshire
Shropshire Fire and Rescue Service said on X: “Shropshire FRS is responding to a landslip affecting the canal in the Whitchurch area.
“For everyone’s safety, members of the public are kindly asked to remain away from the affected area, including Whitchurch Marina, while crews and partners manage the incident.”
Puppy farms, trail hunting and snare traps are all set to be banned under animal welfare reforms being introduced by the government.
Ministers have today unveiled the government’s Animal Welfare Strategy, which also takes aim at other measures seen as cruel, such as shock collars, as well as cages and crates for farm animals.
But while proposals to improve animals’ lives have been welcomed, Labour have been accused of acting like “authoritarian control freaks” for plans to ban trail hunting by 2029.
This is the practice that sees an animal scent laid through the countryside, which then allows riders and dogs to ‘hunt’ the smell.
Labour banned fox hunting outright in 2004, but Sir Keir Starmer’s government has suggested trail hunting is now “being used as a smokescreen for hunting” foxes.
Announcing the reforms, Environment Secretary Emma Reynolds said: “This government is delivering the most ambitious animal welfare strategy in a generation.
“Our strategy will raise welfare standards for animals in the home, on the farm and in the wild.”
More on Animal Welfare
Related Topics:
Image: Emma Reynolds has said the UK is a “nation of animal lovers”.
Pic: PA
Under the proposals, puppy farms – large-scale sites where dogs are bred intensively – will be banned.
This is because these farms can see breeding dogs kept in “appalling conditions” and “denied proper care”, resulting in “long-term health issues”, according to the Department for the Environment, Food and Rural Affairs (DEFRA).
The strategy has also launched a consultation on banning shock collars, which use electricity to sting pets and prevent them from escaping.
Other proposals include introducing new licences for rescue and rehoming organisations, promoting “responsible” dog ownership and bringing in new restrictions for farms to improve animal welfare.
These will see bans on “confinement systems” such as colony cages for hens and pig-farrowing crates, while requirements will be brought in to spare farmed fish “avoidable pain”.
The use of carbon dioxide to stun pigs will also be addressed, while farmers will be encouraged to choose to rear slower-growing meat chicken breeds.
In order to protect wild animals, snare traps will be banned alongside trail hunting, while restrictions on when hares can be shot will be introduced.
Image: Reform UK leader Nigel Farage has said the government “might as well ban walking dogs in the countryside”.
Pic: PA
The reforms have been publicly welcomed by multiple animal charities, including the RSPCA, Dogs Trust, Battersea Dogs and Cats Home, and World Farming UK, as well as by the supermarket Waitrose.
Thomas Schultz-Jagow, from the RSPCA, called the proposals a “significant step forward” and said they have the potential to improve millions of lives.
He added: “People in the UK love animals, and they want to see governments leading the way to outlaw cruel practices which cause suffering. This strategy leads the way by showing a strong commitment to animal welfare.”
Meanwhile, the Greens have also welcomed it but warned the strategy must have “real teeth”, “clear timescales” and “properly support farmers through the transition and not allow imports that don’t meet UK standards”.
Adrian Ramsay said: “Puppy legislation must end breeding for extreme, unhealthy traits in dogs. The strategy could go further for animals, particularly by ending greyhound racing, as the Welsh Government is doing.”
But the Conservatives have hit out at the strategy, saying it shows Labour “simply doesn’t care about rural Britain”.
Victoria Atkins, the shadow environment secretary, said: “While it is good to see the government taking forward Conservative policies to tackle puppy smuggling and livestock worrying, Labour is yet again favouring foreign farmers over British farmers by allowing substandard foreign imports to undercut our already-high welfare standards.”
She also accused Labour of announcing the strategy on the Monday before Christmas “to avoid scrutiny” as “they know that this will be another hammer blow to farming profitability”.
Hundreds of tractors are heading to Westminster to protest over changes to inheritance tax rules.
Challenged on whether the government will make meat import standards the same as those for UK farmers, a spokesperson for the PM said: “We will always consider whether overseas products have an unfair advantage, and we are prepared to use the full range of powers of disposal to ensure produce made here in the UK by our farmers is always the most viable option.
“The farming road map due in 2026 will set out our long-term vision.”
They pointed to the 57 recommendations put forward by former NFU boss Baroness Minette Batters last week, following the completion of the Farm Profitability Review. The spokesperson said that ministers are “considering them carefully”.
‘The Met have scored an own goal here and created carnage… we need to exercise our right to protest,’ said organiser Dan Willis.
But responding to the strategy, Nigel Farage said: “So now Labour wants to ban trail hunting. You might as well ban walking dogs in the countryside as they chase rabbits, hares, deer and foxes. Labour are authoritarian control freaks.”
Meanwhile, the Countryside Alliance, an organisation that promotes rural sport, said: “Why does the government want a war with the countryside?
“Trail hunting supports hundreds of jobs and is central to many rural communities. After its attack on family farms, the government should be focusing on addressing issues that actually help rural communities thrive, rather than pursuing divisive policies that hinder them.”
Two men have been jailed for raping a teenage girl in Rotherham more than two decades ago.
Kessur Ajaib, 44, received eight-and-a-half years for one count of rape and one count of indecent assault. Mohammed Makhmood, 43, got a seven-year sentence for one count of rape.
Their convictions relate to the same victim, who was aged between 14 to 16 at the time.
Sheffield Crown Court heard in July that after Makhmood raped the girl, he called her demeaning names, spat at her and laughed at her.
The pair were sentenced at the same court on Monday after being found guilty alongside another man, Sageer Hussain, in the summer.
The NCA investigated the men as part of Operation Stovewood, the investigation into grooming and child sexual abuse in Rotherham between 1997 and 2013.
More from UK
This breaking news story is being updated and more details will be published shortly.