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Tesla CEO Elon Musk will get his $56 billion salary from the company “one way or another” after Delaware Chancellor Kathleen McCormick denied compensation for the second time Monday night.
That’s according to Wedbush analyst Dan Ives, who said the package rejection was just the latest example of McCormick’s “legal Twilight Zone move.”
On Monday eveningChancellor McCormick overruled the wishes of 72 percent of Tesla shareholders who voted for a second time to give Musk his pay package, which was earned in tranches and was approved back in 2018, and denied that the money was given to the CEO.
McCormick confirmed the voice of shareholdersthat took place last summer, but said it was an attempt to “overturn the outcome of an adverse post-trial decision based on the evidence they created after the trial.”
Musk called the ruling “absolute corruption.”
Ives said in a note to investors this morning that this is the latest chapter in the saga, which will lead to an appeal:
“Judge McCormick initially voided this flagship pay package for Musk in the Delaware courts, which was a shock, and it ended up being the catalyst for Tesla to move its headquarters and operating status from Delaware to Texas. This is just the latest round in the UFC battle between Tesla and the Delaware courts, with much more action to come in the appeals process.”
However, Ives believes that Tesla’s pushback will be precise and persistent, and thinks it’s entirely possible that it could reach the Supreme Court:
“We continue to believe that Tesla and Musk will fight this tooth and nail all the way to the Delaware Supreme Court and then potentially the Federal Circuit as this remains a nasty headache for Tesla, Musk and its shareholders. We also believe that this case could be a catalyst for more public companies to leave Delaware for corporation status, as the legal precedents set by the Tesla/Musk case are very eye-opening for public boards across the country and go against the vote. shareholders. a dangerous precedent, in our opinion.”
At 12:30 p.m. on the East Coast, stocks were down just over two percent.
Tesla CEO Elon Musk again denied $56 billion settlement by Delaware judge
Ives said his firm will maintain an Outperform rating and a $400 price target on the stock. He believes the saga is far from over, saying Tesla will get Musk his pay package “one way or another“:
“Musk is Tesla, and Tesla is Musk. One way or another, the Board will get Musk his pay package (and another long-term one for the next decade) to ensure that Musk will be Tesla’s CEO until at least 2030. The Delaware court battle has turned into a soap opera, and we expect Tesla to ultimately win this battle at the Supreme Court level, given that shareholders have approved this pay package twice in an extraordinary case.”
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