By Hyunjoo Jin and Tom Hals
(Reuters) -After a Delaware court threw out Elon Musk’s $56 billion pay package on Tuesday, the Tesla chief executive and a board seen as captive to him must find a way to negotiate a replacement contract. It will not be easy.
The ruling is spurring on investors who for years have raised concerns about Tesla board independence. This could be a turning point for Musk, who recently said he was uncomfortable transforming Tesla into an artificial intelligence leader if his control did not rise with a new pay package.
“This throws Tesla into a complete sort of tailspin from an executive perspective,” said Tesla shareholder Ross Gerber, who said the court decision essentially required new independent board members who would provide CEO oversight. “Then it gets real messy because Elon – it’s either his way or the highway,” said Gerber, who last year publicly considered a board run as an independent.
Musk has not said what he will do, though an appeal is almost certain. Tesla shares fell 2.2% on Wednesday.