Since the election victory of Donald Trump (78) experienced Elon Musk (53) a high that is extraordinary even for the successful entrepreneur and wealthiest person in the world. Not only that Teslashares recently benefited from Musk’s proximity to US President-elect Trump and the electric car manufacturer’s market value rose to more than $1.1 trillion. As an adviser to Trump, Musk is also leading a new Ministry of Government Efficiency with the aim of reducing government spending USA to be radically shortened. The Tesla boss has never been so powerful before.
The eccentric multi-billionaire’s total wealth has risen to $343 billion when his holdings in SpaceX, social media platform X and xAI are included. The direct line to the Oval Office is likely to continue to be beneficial for business in the future.
And yet Musk now had to suffer a serious legal defeat in court. Judge Kathaleen McCormick (45) in the US state of Delaware on Monday rejected a stock option package agreed in 2018 as excessive for the second time and thus continues to oppose an agreed remuneration for CEO Musk worth billions.
The compensation plan was originally intended to have a total value of $2.6 billion, but due to the sharp rise in Tesla’s share price, this had increased to $56 billion by the time of the initial decision.
Kathaleen McCormick vs. Elon Musk
Who is the judge who will show Musk his limits while cases against Trump are about to be dropped? McCormick is familiar with large sums of money. Delaware’s Court of Chancery regularly deals with the largest and most high-profile M&A deals and legal disputes surrounding them. After all, numerous US corporations have their headquarters in the second-smallest US state because of the favorable tax rules.
The Court of Chancery is the body where major US corporate cases end up. Kathaleen McCormick has been a judge in this chamber since 2018, and in 2021 she was appointed chancellor by the Governor of Delaware, John Carney (67). She is the first woman to head the court.
Quiet and with a clear compass
Judge Katie, as she is often called, does not let herself be deterred from getting to the root of the problem when she identifies injustices. Companions describe her as fearless: McCormick is not frightened by the possible consequences of her decisions. The 44-year-old is known for her high standards of responsible corporate management and her calm demeanor.
Kathaleen McCormick comes from the US state of Delaware and grew up in the small town of Smyrna. Both her parents were teachers. After graduating from high school, she went to Harvard, where she studied philosophy. McCormick received her law degree from the University of Notre Dame Law School in Indiana.
Back in her home state, she worked for a few years as an attorney at Legal Aid, a branch of the Legal Aid Society that helps low-income people with legal issues. For example, it was about questions of discrimination in housing construction.
She then joined Young Conaway Stargatt & Taylor, one of the state’s leading commercial law firms, and worked her way up to partner. She was already involved with the big players there too. Two thirds of the Fortune 500 companies, i.e. the 500 highest-grossing US companies, are based in Delaware. McCormick later said of her time at the commercial law firm: “They taught me a form of advocacy that suited my natural inclinations.” Difficulties in business, as in life, are best faced “not with the ego, but with logic, reason and openness Spirit”.
Tesla shareholder sued
The duel between McCormick and Musk came about because of shareholder Richard Tornetta’s lawsuit against the record high remuneration for the Tesla boss. He had accused the board members of the electric car manufacturer of not being independent when drawing up the salary package for the Tesla boss in 2018.
McCormick also concluded that Musk had close relationships with members of the Tesla board of directors with whom he had negotiated the generous compensation. She therefore awarded the plaintiff’s lawyers $345 million. This amount is far below their demand to be compensated with 29 million Tesla shares – at the current share price that would be more than $10 billion. However, the sum awarded still corresponds to one of the highest legal fees paid in US shareholder lawsuits to date.