He is now threatening to move

This judge canceled Musk’s billion-dollar salary

Judge McCormick has had dealings with Elon Musk before.

(Bild: ASSOCIATED PRESS, courts.delaware.gov, Krone KREATIV,)

The judge who struck down Elon Musk's billion-dollar remuneration package is known for her clear stance - especially when it comes to companies. Kathaleen McCormick has put a financial investor who wanted to wriggle out of a takeover in his place, as well as a company boss who was about to rip off his own shareholders when selling his company. Following her decision, Musk now wants to move Tesla to Texas.

McCormick is the first woman to preside over the Court of Chancery in Delaware, where major US corporate proceedings end up. The lawyer is considered smart, she speaks in an unobtrusive and approachable manner, quite the opposite of some of the parties involved in the proceedings.

For example, Tesla boss Elon Musk, who is often boisterous and loud. Years ago, he negotiated a remuneration package for his work as head of the e-car manufacturer that ended up putting 56 billion dollars (the equivalent of 52 billion euros) in his pockets. McCormick declared the agreement invalid on Tuesday. It was an "incredible sum", she said. Musk can appeal the ruling to the Delaware Supreme Court.

Not the first encounter
McCormick has had dealings with the eccentric entrepreneur before. In July 2022, the judge conducted the proceedings against Musk when he wanted to back out of his 44 billion dollar offer to take over the short message service Twitter, now known as X. She emphasized that she wanted to protect the company and its shareholders from harmful uncertainty. The Tesla founder eventually backed down. "She's met a lot of guys like Musk in private," says University of Delaware professor emeritus Charles Elson. "He's not going to intimidate her."

McCormick began her career at the Delaware branch of the Legal Aid Society, which helps low-income people with legal issues. She eventually moved into the private sector and joined one of the state's leading business law firms, Young Conaway Stargatt & Taylor. "There I learned a form of advocacy that suited my natural inclination," she said at her confirmation hearing before the Delaware Senate. That difficulties in business and in life are best met "not with ego, but with logic, reason and an open mind."

Lawyers' pay cut
Her opinions run to more than 100 pages, which she breaks up with quotes from cookbook author Julia Child and insights from college football legend Knute Rockne, who coached at Notre Dame, where she earned her law degree. She has defended her court against conservative critics from the ranks of former US President Donald Trump and stood up for small shareholders. She has even protected them from their own lawyers: In July, she cut the fees of lawyers who had filed a dubious lawsuit against a company on behalf of shareholders by more than 90 percent. "If there is not much to be gained in a lawsuit, the plaintiffs' lawyers should not be paid much either," she wrote.

Meanwhile, Musk wants to move his car manufacturer Tesla to Texas. Following an online vote, he is therefore asking shareholders to approve the move to Texas. "Public opinion is unanimously in favor of Texas! Tesla will immediately convene a shareholder meeting so that the company can fully relocate to Texas," Musk wrote on his X platform.

It wouldn't be the first time Musk has relocated after a dispute with authorities. Tesla has already moved its operational headquarters from California to Austin, Texas in 2021. This was preceded by an exchange of blows with the health authorities when it came to reopening the factory in Fremont after the outbreak of the coronavirus pandemic. Musk had also protested against regulations and taxes in California. Other companies owned by the billionaire, such as the aerospace company SpaceX and The Boring Company, which wants to dig tunnels for transportation systems, are also based in Texas.