Delaware Judge Kathleen St. J. McCormick faced swift and severe backlash on social media after she blocked Elon Musk’s multibillion-dollar Tesla Inc. compensation for a second time.
Elon Musk swiftly condemned the decision as “absolute corruption” on X. At the same time, Tesla advocate Cathie Wood criticized McCormick as “an activist judge at its worst,” accusing her of undermining shareholder rights. Other Musk supporters labelled the decision “insane.”
As the chief judge of Delaware Chancery Court, McCormick is seasoned in handling backlash from Musk-related cases. She previously faced criticism in January when she first cancelled Musk’s compensation because he overly influenced Tesla’s board. Similarly, in 2022, she stood firm against Musk’s attempt to exit a $44 billion deal to buy X’s predecessor, Twitter.
Eric Talley, a corporate litigation professor at Columbia University, noted that legal rulings can become particularly intense when they involve high-profile corporate figures.
Neither McCormick nor Musk responded to comments on Tuesday. Musk’s influence and wealth have surged since the US presidential election, partly because of his close ties with Donald Trump.
Originally valued at $2.6 billion, Musk’s stock options package soared to $56 billion by January when McCormick cancelled it, and it was worth $101.5 billion at Monday’s market close. Following the ruling, Tesla shares dropped 1.6% on Tuesday.
With 206 million followers on X, Musk uses his platform to mobilize his fans, including many Tesla investors. Several users expressed frustration at McCormick for blocking what would have been the largest-ever pay package for a corporate executive.
One user suggested, “She needs to be in jail,” targeting the judge.
Musk has also warned that McCormick’s decision might drive businesses away from Delaware, a corporate hub for about two-thirds of Fortune 500 companies. He has begun relocating Tesla and other ventures to Texas, seeking a more favourable regulatory environment and a new business-court system.
Despite criticism, McCormick has received commendation from some legal experts for her steadfastness amidst pressure, highlighting her courage and integrity. Jill Fisch, a law professor at the University of Pennsylvania, praised McCormick for not yielding under pressure.
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Ann Lipton from Tulane University mentioned that McCormick’s ruling aligns with Delaware law and emphasized that Musk must be treated like other corporate executives.
Daniel Ives, a Wedbush analyst, commented that McCormick’s decision might not be the final verdict on Musk’s pay, noting that Tesla plans to appeal.
“This continues to be a soap opera playing out in Delaware,” he remarked. The case, Tornetta v. Musk, is ongoing in the Delaware Chancery Court in Wilmington.
