Tesla's compensation case ruling upheld, analysts expect victory in appeal to the Supreme Court

According to the Zhitong Finance APP, Tesla (TSLA.US) stock price is still under pressure as the ruling by Delaware Court of Chancery Judge Kathaleen McCormick remains a tricky issue for Musk and shareholders. This ruling upheld the previous decision to revoke Musk's compensation plan and awarded the plaintiffs $345 million in attorney fees. Dan Ives from Wedbush stated that Musk is closely tied to Tesla, and the board will ultimately allow Musk to receive his compensation plan and future long-term plans, even if the case needs to be appealed to the U.S. Supreme Court. Although the protracted battle between Tesla and the court will intensify, Ives believes that given shareholders have overwhelmingly approved the compensation plan twice, Tesla will ultimately win this fight at the Supreme Court level.The compensation case began in 2018 when Tesla's board granted Musk 304 million stock options, contingent upon the company achieving specific operational and financial goals. However, as the goals were met, Musk's compensation seemed to be a foregone conclusion and continued to grow, which led to dissatisfaction from a shareholder who sued the company in Delaware court. The plaintiff accused the compensation of being the result of "false negotiations" between a self-serving board and an intimidating CEO. Judge McCormick ruled in favor of the shareholders, revoking Musk's compensation plan, which also prompted Tesla to move its headquarters from Delaware to Texas.Tesla's lawyers assured the Delaware Court of Chancery that the court retains jurisdiction over Musk's compensation and submitted the matter for a shareholder vote. After voting, more than three-quarters of Tesla's voting shareholders (excluding shares held by Musk and his brother Kimbal Musk) approved the compensation plan. However, Judge McCormick maintained her previous decision in her opinion on Monday, stating that even though the shareholder vote produced an approval effect, it does not apply here.This ruling is a blow to both Tesla and Musk, as the compensation plan is one of the key motivations for Musk to remain at Tesla and continue leading the company. An appeal will remain an unresolved issue for Tesla, especially if a new appeal plan must be issued. However, Dan Levy from Barclays stated that despite this being an unresolved issue, Musk is willing to patiently wait for the process and is committed to Tesla