Tesla kicks off legal fight to reinstate Musk's pay

Tesla believes that the shareholder vote ratifying Elon Musk's pay package significantly impacts the claims and issues in the action, including the court's final judgment. The company argues that the ratification process has now cured the problems raised in Chancellor Kathaleen McCormick's ruling in January, where she found Musk controlled the 2018 process that led to the pay package and that Tesla concealed key information from shareholders about the ease of the targets the company had to meet for Musk to be paid. Tesla has said the ratification process was "novel" and it was unclear if McCormick and the Delaware Supreme Court would accept the result.

Greg Varallo, the shareholder attorney, argued that the ratification had "no legal effect" on the case because it did not address the underlying issues raised in the case. Specifically, the ratification did not change the fact that Elon Musk controlled the 2018 process that led to the pay package, and that Tesla concealed key information from shareholders about the ease of the targets the company had to meet for Musk to be paid. Varallo contended that the ratification was not a valid legal remedy for these issues and therefore had no impact on the case.