WASHINGTON, Jan 31, (Agencies): A Delaware judge invalidated Elon Musk's Tesla pay package, valued at $55.8 billion, on Tuesday, asserting that the board of directors failed to establish the fairness of the compensation plan. The pay package, granted to Musk in 2018, was deemed by Delaware Chancery Court Judge Kathaleen St. J. McCormick as the "largest potential compensation opportunity ever observed in public markets by multiple orders of magnitude," according to her 200-page ruling.

The challenge against the package was initiated by Tesla shareholder Richard Tornetta, who sought to cancel it, contending that the automaker's board of directors had "breached their fiduciary duties by awarding Elon Musk a performance-based equity-compensation plan," as highlighted by McCormick. The judge determined that Tornetta successfully demonstrated Musk's control over Tesla and criticized the flawed process that led to the approval of Musk's substantial pay package.

McCormick emphasized Musk's significant influence over Tesla, citing his close ties with those negotiating on behalf of the company. She detailed Musk's involvement in a self-driving process, where he adjusted the speed and direction at his discretion. The judge concluded that Musk's extensive relationship with the company and its directors granted him an "enormous influence" over Tesla's affairs.