Judge voids Elon Musk's 'unfathomable' $56 billion Tesla pay package

A Delaware judge tossed out Elon Musk's record-breaking $56 billion Tesla, opens new tab pay package on Tuesday, calling the compensation granted by the EV maker's board "an unfathomable sum" that was unfair to shareholders.

Shares of Tesla dropped about 2% in premarket trade, and some investors seized on the ruling in hopes it might prompt Tesla to overhaul its governance.

The Tesla board has been criticized as failing to provide oversight of its combative, headline-making CEO, who has fought regulators and led several other companies at the same time.

The ruling, which can be appealed, nullifies the largest pay package in corporate America. The judge found the share-based compensation was negotiated by directors who appeared beholden to Musk, currently ranked by Forbes magazine as the world's richest person.

Tesla's 10-year pay agreement with Musk reached in 2018 would be worth around $51 billion at Tuesday's closing price for Tesla stock, accounting for the cost to Musk to exercise the options.

That would be about a quarter of his $210.6 billion fortune, as calculated by Forbes magazine, which currently ranks about $2 billion ahead of LVMH, opens new tab CEO Bernard Arnault of France and his family....