Defense attorneys say the vote makes clear that Tesla shareholders, with full knowledge of the flaws in the 2018 process that McCormick pointed out in her January ruling, are adamant that Musk is entitled to the pay package. Photo via cdn.britannica.com

Attorneys for Elon Musk and Tesla’s corporate directors are asking a Delaware judge to vacate her ruling requiring the company to rescind a massive and unprecedented pay package for Musk.

Friday's hearing follows a January ruling in which Chancellor Kathaleen St. Jude McCormick concluded that Musk engineered the landmark 2018 pay package in sham negotiations with directors who were not independent. The compensation package initially carried a potential maximum value of about $56 billion, but that sum has fluctuated over the years based on Tesla's stock price.

Following the court ruling, Tesla shareholders met in June and ratified Musk’s 2018 pay package for a second time, again by an overwhelming margin.

Defense attorneys say the vote makes clear that Tesla shareholders, with full knowledge of the flaws in the 2018 process that McCormick pointed out in her January ruling, are adamant that Musk is entitled to the pay package.

“Honoring the shoulder vote would affirm the strength of our corporate system,” David Ross, an attorney for Musk and the other individual defendants, told McCormick. “This was stockholder democracy working.”

Ross told the judge that the defendants were not challenging the factual findings or legal conclusions in her ruling, but simply asking that she vacate her order directing Tesla to rescind the pay package.

McCormick, however, seemed skeptical of the defense arguments, peppering attorneys with questions and noting that there is no precedent in Delaware law for allowing a post-trial shareholder vote to ratify adjudicated breaches of fiduciary duty by corporate directors.

“This has never been done before,” she said.

Defense attorneys argued that, while they could find no case that is exactly comparable, Delaware law has long recognized shareholder ratification as a cure to corporate governance errors, and has long acknowledged the “sovereignty” of shareholders as the ultimate owners of a corporation.

“I candidly don’t see how Delaware law can tell the owners of the company that they’re not entitled to make the decision they made,” said Rudolf Koch, an attorney for Tesla.

Donald Verrilli, a lawyer for an induvial stockholder who owns more than 19,000 Tesla shares, suggested that it would be wrong for the lone shareholder who filed the lawsuit to thwart the will of the majority of Tesla shareholders. At the time the lawsuit was filed, the plaintiff owned just nine shares of Tesla stock.

“The voice of the majority of shareholders should matter…. This lawsuit is not representing the interest of the shareholders," Verrilli said.

Thomas Grady, an attorney for a group of Florida objectors who own or manage almost 8 million Tesla shares with some $2 billion, argued that for McCormick to rule for the plaintiff, she has to “disenfranchise” all other Tesla shareholders.

Greg Varallo, an attorney for the plaintiff, urged McCormick not to give any credence to the June shareholder vote, saying it has no legal precedent in Delaware or anywhere else. There also is no reason for the court to reopen the trial record and admit new evidence, he said.

Under Delaware law, stockholders have no authority to overrule courts by trying to use a post-trial ratification vote as a “giant eraser,” Varallo argued.

“Ratification is not magic, and it never has been,” Varallo added. “This should end here and now.”

McCormick gave no indication on when she would rule. She also has yet to rule on a huge and unprecedented fee request by plaintiff attorneys, who contend that they are entitled to legal fees in the form of Tesla stock valued at more than $7 billion.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Houston startup strikes deal to develop hydrogen production plant in Canada

hydrogen partnership

Houston-based cleantech startup Vema Hydrogen has reached a tentative agreement with Canada-based CHARBONE Corp. to develop a hydrogen production and processing plant in Québec.

The deal would couple Vema’s production of engineered mineral hydrogen with CHARBONE’s purification, compression and distribution capabilities.

Engineered mineral hydrogen, also known as orange hydrogen, is produced underground by accelerating naturally occurring geochemical reactions in iron-rich rock formations, according to the journal Energy & Environmental Science.

“Across high-value markets — from aviation and maritime fuels to industrial gases — there is incredible demand for Vema’s low-carbon [hydrogen]. Now, more than ever, we need a pathway to deliver these low-carbon fuels,” Pierre Levin, CEO of Vema, said in a news release.

The project would enable Vema to expand into emerging markets like low-carbon maritime and aviation fuel, e-fuels and power generation. Incorporating CHARBONE’s capabilities, the agreement would also support Québec’s hydrogen supply chain.

“The market is demanding high-value industrial gases, and our customers need cleaner, more reliable supply. By pairing Vema’s [hydrogen] feedstock with our purification and distribution capabilities, we’re strengthening Québec’s position as a regional hub for next-generation hydrogen,” Dave Gagnon, CEO of CHARBONE, added in the release.

Vema said in February that it had completed drilling of its first two pilot wells in Québec, making them the world’s first pilot well for orange hydrogen. It’s the first time Vema’s technology has been used outside a lab.

“This pilot will provide the critical data needed to validate [our hydrogen] at commercial scale and demonstrate that Quebec can lead the world in this emerging clean energy category,” Levin said. “The quality of the rock within our core samples is exactly what we expected and is very promising for hydrogen yields.”

Shortly before Vema carried out the pilot drilling, it signed a 10-year deal with California-based energy technology company Verne Power to supply clean hydrogen for California data centers. Over the course of the 10-year agreement, Vema will boost annual production of orange hydrogen to more than 36,000 metric tons.

“There is a robust market for baseload power generation across the U.S., where data centers are straining the grid,” Levin said. “As we power California’s fastest-growing markets with clean hydrogen, we look toward expanding our hydrogen to markets globally and supporting AI-driven power hubs.”

Vema, founded two years ago, raised $13 million in seed funding in 2025.

“The energy transition and emerging uses of hydrogen have spurred demand for clean hydrogen,” Levin said in its funding announcement. “However, existing decarbonized hydrogen production methods simply don’t work — they are too costly and energy-intensive. Vema is here to change that. It’s time to unlock a new era of scalable, low-carbon hydrogen.”

Greentown names 5 climatech startups to manufacturing accelerator

Catalyst Cohort

Greentown Labs has named five climatech startups to its Go Make 2026 cohort, including one from Houston.

Greentown Go Make 2026 is in partnership with Shell Catalysts & Technologies and Technip Energies. Startups will be able to collaborate with leadership from Shell and Technip and have opportunities to work directly with their process engineering teams and develop potential partnerships, pilots and demonstrations, according to Greentown.

This year's manufacturing cohort focuses specifically on process technology and catalytic innovations, which, according to Greentown, have the potential to be a "critical enabler of the global energy transition." Greentown shares that 90 percent of chemical processes depend on catalysis, but traditional methods rely on fossil fuels and consume significant amounts of energy.

“Catalysis underpins the majority of industrial chemical processes, which together account for a significant share of global emissions, making it a critical lever for reducing carbon intensity while improving performance,” Georgina Campbell Flatter, CEO of Greentown, said in a news release. “Greentown Go Make 2026 is designed to close the gap between breakthrough innovation and industrial deployment. By connecting startups with Shell and Technip Energies’ technical expertise and global scale, we’re helping accelerate solutions that improve efficiency and drive industrial decarbonization.”

The five Greentown Go Make 2026 companies include:

  • Houston-based Biosimo, which makes scalable biochemicals from ethanol
  • Missouri-based Catalyxx, which transforms bioethanol into drop-in, cost-competitive, carbon-negative chemicals
  • Sydney, Australia-based HydGene Renewables, which produces low-carbon hydrogen and industrial chemicals from waste biomass
  • Switzerland-based TreaTech, which turns waste into renewable gas, water and minerals through catalytic hydrothermal gasification
  • California-based Unifuel, which has developed a chemical technology platform to make sustainable aviation fuel, renewable gasoline and other renewable chemicals

The cohort will be celebrated at a kickoff event in Houston at The Ion on June 9.

In addition to Greentown Go Make, Greentown also runs its Go Move (transportation), Go Energize (energy and electricity), Go Build (buildings), and Go Grow (food and agriculture) cohort-based programs. The climatech incubator announced its Go Build 2026 cohort in March. Read more here.