Despite being authorized by directors and shareholders in the summer, the Delaware court’s ruling follows months of legal struggle.
Judge Kathaleen McCormick maintained her earlier ruling from January, in which she claimed that Mr. Musk had too much influence over the board members.
On X, Mr. Musk responded to the decision by writing: “Shareholders should control company votes, not judges.”
Tesla declared that the verdict was “wrong” and promised to appeal it.
The electric car business wrote on X, “This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders.”
The compensation package would have been the biggest ever for the CEO of a publicly traded business, according to Judge McCormick.