The boss of Tata Steel has defended his decision to make thousands of workers redundant at Port Talbot, denying an accusation that £500m in government support represented “the deal of the century” for the company.
TV Narendran, Tata Steel’s global chief executive, told MPs on Wednesday that the decision to close two blast furnaces at the south Wales site was driven by steep losses at the steelworks, which he said came to £160m in the last quarter.
Tata Steel this month announced the blast furnaces would close by the end of summer, to be replaced by a new electric arc furnace part-funded by a £500m government subsidy. The company said the decision would affect 2,500 jobs at Port Talbot and a further 300 at another south Wales site, in Llanwern.
The switch will dramatically reduce carbon emissions, but will require far fewer workers, dealing a devastating blow to the town, whose economy and community is dominated by the steelworks. Welsh steelworkers protested against the blast furnace closure outside parliament on Wednesday.
Narendran told a hearing of parliament’s Welsh affairs committee that the government would not consider covering the UK company’s losses and that shareholders in the Indian-listed parent group had grown weary over the billions of pounds spent on the plant during 15 years of ownership.
Stephen Crabb, the Conservative MP who chairs the committee, said: “We have a plan now which doesn’t save blast furnaces, doesn’t save jobs in Port Talbot, and you’ve managed to get UK government to give £500m for it. I mean, that must be the deal of the century for you?”
Unions at the hearing criticised Tata’s decision. Community, GMB and Unite have all called for the blast furnaces to be kept open for longer. Alasdair McDiarmid, Community’s assistant general secretary, said: “The focus has been on price, rather than what’s best for the country, the industry and the workforce.”
Sharon Graham, the general secretary of Unite, said that “Tata must change direction” and wait for a Labour government; the party has promised about £2bn in extra funding for UK steel on top of the £1bn under discussion with Tata and the Chinese-owned British Steel. Narendran said Tata needed more detail on Labour’s plans.
The hearing took place in a room named after Margaret Thatcher, who closed large parts of the UK’s steel industry in 1980 and privatised the rest.
The Tata decision, along with a similar plan by British Steel to close blast furnaces at Scunthorpe, will represent a new era for the UK as it will leave the country unable to produce steel from iron ore for the first time since the Industrial Revolution. Tata’s plan for Port Talbot instead relies on using scrap steel from the UK, which is mostly exported.
Narendran confirmed that the company would consider investment in direct reduced iron (DRI) technology that could produce net zero iron from ore. DRI could be used with an electric arc furnace and would create hundreds of jobs, although not enough to counterbalance the thousands lost from the blast furnace closures.
Narendran said the company would invest in DRI technology only if it could guarantee a good supply of, at first, methane and then zero-emissions hydrogen. He said the Netherlands, where Tata is building a DRI plant, had a supply of methane gas that was lacking in the UK, but MPs on the committee questioned whether the company could use existing gas supplies piped through south Wales from a terminal on the west coast.
Narendran said: “At a later stage if there is an availability of a lot of gas in Port Talbot and at whatever price … then we can certainly look at setting up a DRI plant in Port Talbot.”
A judge in the US state of Delaware has annulled a $55.8bn (£44bn) pay deal awarded to Elon Musk in 2018 by the electric car company Tesla.
The lawsuit was filed by a shareholder who argued that it was an overpayment.
Judge Kathaleen McCormick called the compensation "an unfathomable sum" that was not fair to shareholders and said the process leading to the package being approved was "deeply flawed".
She ruled the contract should be cancelled.
The pay deal, decided back in 2018, was the biggest ever in US corporate history, helping to make Mr Musk the richest person in the world. Bloomberg and Forbes estimated his net worth to be between $198bn (£162bn) and $220bn (£180bn), in November 2023.
Tesla's package tied Mr Musk's compensation to performance targets, such as Tesla's share price and profitability. He does not receive a salary.
But Tesla shareholder Richard Tornetta launched legal action calling for the award to be rescinded, arguing the tycoon had been overpaid.
Following years of legal argument, a week-long trial commenced in November 2022 where Tesla directors argued the huge pay award was designed to ensure that Mr Musk, one of the world's most dynamic entrepreneurs continued to dedicate his attention to the company.
But in her 201-page ruling released on Tuesday, Judge McCormick said that Tesla directors had been "swept up by the rhetoric" surrounding Mr Musk's "superstar appeal".
Moreover, Mr Musk had "extensive ties" with the Tesla officials tasked with negotiating the pay award. She cited his 15-year relationship with the compensation committee chair, Ira Ehrenpreis.
Mr Musk also had business relations with another compensation committee member Antonio Gracia dating back more than 20 years, the judge said.
Following the release of the ruling, Greg Varallo, an attorney for the Tesla shareholder Mr Tornetta, said it was a "good day for the good guys," in an email reported by the Reuters news agency.
In a post on X, formerly known as Twitter, Mr Musk said: "Never incorporate your company in the state of Delaware".
"I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters"," he added. He then posted a poll asking his followers whether or not Tesla should "change its state of incorporation to Texas, home of its physical headquarters".
The judge's ruling can be appealed to the Delaware Supreme Court.
Shares in Tesla were down by around 2.5% in extended New York trade. They have lost more than 20% of their value so far this year.
As well as being the chief executive and a major shareholder of Tesla, Mr Musk also owns several other companies including the social media platform X, the rocket company SpaceX, and the brain chip firm Neuralink.
After selling a large chunk of his stake in Tesla to buy X, Mr Musk currently owns about 13% of the electric carmaker but has recently said he wants a bigger stake in the firm.
When Tesla put forward Mr Musk's original 10-year pay package in 2018, it attracted widespread public attention. Several shareholder advisory groups recommended voting against the plan, saying it was overly generous.
The package was six times bigger than the salaries of America's top 200 chief executives combined in 2021, according to research firm Equilar.
Brian Quinn, a professor at Boston College Law School, told the BBC it was "hard to justify a transaction like this", given Mr Musk's influence over the board.
"He treats Tesla like his own but even if he calls himself the 'Techno-king of Tesla', he is not the majority owner," Prof Quinn added.
Mr Musk has also said he is concerned about Tesla's investments in artificial intelligence (AI) technology.
"I am uncomfortable growing Tesla to be a leader in AI and robotics without having 25% voting control," he said in a social media post.
He said the current shareholder structure makes Tesla vulnerable to a "takeover by dubious interests" and he wants more control over its direction.
"Unless that is the case, I would prefer to build products outside of Tesla," Mr Musk added.
The outlook for the UK housing market is “more positive” as prices improved at their strongest rate in a year, according to Nationwide.
The building society’s index found that the average house price had increased by 0.7% in January on the previous month – a significant turnaround from the December figures, which showed a 1.8% decline in prices.
The average UK house price was £257,656 in January, and was down 0.2% on a year earlier.
Robert Gardner, Nationwide’s chief economist, said: “While a rapid rebound in activity or house prices in 2024 appears unlikely, the outlook is looking a little more positive.”
He said this had been driven by “encouraging signs” for buyers with mortgage rates continuing to trend down.
He added: “This follows a shift in view among investors around the future path of [interest rates], with investors becoming more optimistic that the Bank of England will lower rates in the years ahead.”
Despite this optimism, the Bank is expected to keep its rate unchanged at 5.25% when it updates the market on Thursday. The US Federal Reserve is also expected to maintain its rate at between 5.25% and 5.5%, when it publishes an update on Wednesday night.
Verona Frankish, the chief executive of the online estate agent Yopa, said: “While we expect that interest rates will remain at 5.25% this week, this will only help to steady the market further, providing buyers with the confidence that they can proceed with their purchase without the goalposts of mortgage affordability moving during the process.”
Nationwide also pointed to data from the Royal Institute of Chartered Surveyors (Rics) that suggested the decline in inquiries from new buyers had halted, and there were “tentative signs” that more homes were coming on to the market.
Nationwide cautioned that the path of interest rates over the coming months would be crucial as affordability pressures continued to hamper the market and held back activity in 2023.
Currently, a borrower earning an average UK income and buying a home with a 20% deposit had a monthly mortgage payment equivalent to 38% of take-home pay – well above the long term average of 30%.
It said mortgage rates would need to trend towards 3% to bring the affordability measure back down towards to 30% of take-home pay.
Gardner said: “There remains considerable variation in affordability across the country, with pressures particularly acute in London, the south of England and East Anglia. Scotland and the north continue to be the most affordable regions, with mortgage payments as a share of take-home pay much closer to their long-run average.”
In London, the average income of actual first-time buyers is about 55% higher than the average income in the capital. This has meant an increasing number of first-time buyers are turning to family, friends or inheritance to buy their homes.
In 2022-23, nearly half of first-time buyers had some help raising a deposit, either in the form of a gift or loan from family or friends, or through inheritance, which has nearly doubled from 27% in the mid-1990s.
Investors expect the pound will rally to its highest level against the dollar in two years as the Bank of England proves to be slower at cutting interest rates than its peers.
Wall Street giant Goldman Sachs thinks sterling will hit $1.30 and 84p per euro in the next few months as the US Federal Reserve and European Central Bank begin cutting interest rates.
The pound was last down 0.1pc against the dollar at $1.26 but up 0.1pc against the euro at 85p.
Strategist Isabella Rosenberg said the pound has “benefited considerably from the global disinflation trend and shift toward policy easing”.
Meanwhile, PGIM Fixed Income warned that tax giveaways in the next Budget ahead of a general election could force the Bank of England to keep interest rates higher.
Global investment strategist Guillermo Felices said: “There’s life in the pound.
“Currencies love a tight monetary policy and loose fiscal policy, and we’re getting a flavour of this in the UK.”
The Bank of England is expected to hold interest rates at 16-year highs of 5.25pc tomorrow, with money markets predicting four quarter-point cuts this year to take rates to 4.25pc.
The Fed is expected to make five equivalent rate cuts and the European Central Bank is predicted to make six before the end of the year.
The outlook for the UK housing market is “more positive” as prices improved at their strongest rate in a year, according to Nationwide.
The building society’s index found that the average house price had increased by 0.7% in January on the previous month – a significant turnaround from the December figures, which showed a 1.8% decline in prices.
The average UK house price was £257,656 in January, and was down 0.2% on a year earlier.
Robert Gardner, Nationwide’s chief economist, said: “While a rapid rebound in activity or house prices in 2024 appears unlikely, the outlook is looking a little more positive.”
There is more misery for rail commuters as strikes continue.
Rail passengers in the north of England face major disruption on Wednesday as strikes by train drivers stop all Northern and TransPennine Express (TPE) services.
The 24-hour strike is the second in a series of rolling stoppages over a week by members of Aslef, the drivers’ union, in the long-running pay dispute.
It follows strikes that wiped out the biggest national rail commuter services in southeast England yesterday. Passenger numbers on the tube were down 10% from last Tuesday with many rail commuters unable to reach the capital, according to figures from Transport for London.
Both Northern and TPE have warned customers not to attempt to travel on Wednesday as no services will run, including on TPE’s routes into Scotland. An overtime ban that started on Monday across all the operators in England is also expected to bring more short-notice cancellations to services and potential disruption until next Tuesday.
In the US, a Delaware judge ruled in favour of the investors who challenged billionaire Elon Musk’s $56bn Tesla pay package as excessive, a court filing showed.
The judge found that Musk’s compensation was inappropriately set by the electric-vehicle maker’s board and struck down the package. If the decision survives any potential appeal, the Tesla board will have to come up with a new compensation package for Musk.
“Never incorporate your company in the state of Delaware,” Musk responded on Twitter/X.
Britain’s second-biggest drugmaker GSK has beaten analyst expectations with fourth-quarter profits and sales thanks to a strong launch of its new RSV vaccine coupled with steady demand for its shingles shot and HIV medicines.
In the first annual results since the company spun off its consumer healthcare business Haleon (in July 2022), GSK reported a pretax profit of £6.1bn, up 14% at constant exchange rates. Turnover rose 5% to £30.3bn. It made sales of £8.05bn in the final quarter of the year.
Emma Walmsley’s strategy is focused on vaccines, infectious diseases and HIV drugs, with further acquisitions likely to boost the firm’s pipeline of new medicines. GSK has 71 vaccines and specialty medicines in clinical development, including 18 in late stage trials.
Its Arexvy vaccine for RSV (respiratory syncytial virus), a common respiratory virus that usually causes mild, cold-like symptoms but can be serious for children and elderly people, was the first approved RSV vaccine for older adults in May when the US regulator approved it.
The jab has become a blockbuster (with more than $1bn annual sales) and has outshone US rival Pfizer’s shot Abrysvo. More than a fifth of adults over 60 in the US have been vaccinated with either jab so far.
GSK is attempting to lower the age threshold from 60 to 50. The RSV vaccine was launched in the US last autumn and has an estimated two-thirds market share, with sales of more than £1.2bn so far.
It brought in sales of £529m between October and December, while GSK’s shingles vaccine Shingrix generated £908m.
Walmsley said clear highlights in 2023 were the “exceptional launch of Arexvy and continued progress in our pipeline”.
We are now planning for at least 12 major launches from 2025, with new vaccines and specialty medicines for infectious diseases, HIV, respiratory and oncology. As a result of this progress and momentum, we expect to deliver another year of meaningful sales and earnings growth in 2024, and we are upgrading our growth outlooks for 2026 and 2031. We remain focused on delivering this potential - and more - to prevent and change the course of disease for millions of people.
Richard Hunter,head of markets at interactive investor,said:
GSK has delivered a reminder that it remains a serious player on the global stage, with successful product launches being followed by a strong pipeline of potential new drugs.
The long-term potential of the sector is not in question, as moves towards personalised medicine and growing middle classes in emerging markets provide possibilities for endless demand. Meanwhile, the move away from the “white pills and Western markets” model , a phrase which Glaxo coined some years ago, is translating into a more specialised business, which was confirmed by the spin-off of its consumer healthcare unit Haleon in 2022.
Rachel Reeves, the shadow chancellor, has said that Labour will not reinstate a cap on bankers’ bonuses that was scrapped lat year by the Conservative government.
In a big shift from previous Labour policies, she set out Labour’s plans to boost economic growth through financial services, which she described as one of the UK’s greatest assets that the party will “unashamedly champion”.
Bankers’ bonuses were capped at 200% of their regular pay across the EU to deter the excessive risk taking that many say caused the financial crisis.
The short-lived Liz Truss government abandoned the bonus cap. Reeves, a former Bank of England economist, told the BBC that she has no plans to reinstate it, despite criticism from the umbrella body for the UK’s trade unions at the time.
The cap on bankers’ bonuses was brought in in the aftermath of the global financial crisis and that was the right thing to do to rebuild the public finances.
But that has gone now and we don’t have any intention of bringing that back. And as chancellor of the exchequer, I would want to be a champion of a successful and thriving financial services industry in the UK.
Reeves said Labour’s policies will also include closer ties with the EU, expanding finance centres outside London, streamlining regulation and boosting pension investment in UK companies and green technologies.
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
House prices across the UK rose this month, as buyers took advantage of mortgage rates trending down, according to a survey.
The average price of a home increased by 0.7% to £257,656 in January, following no monthly change in December, according to Nationwide building society. Compared with January last year, prices were down just 0.2%, following an annual decline of 1.8% in December. It was the smallest annual drop in a year.
Robert Gardner, Nationwide’s chief economist, said:
There have been some encouraging signs for potential buyers recently with mortgage rates continuing to trend down. This follows a shift in view amongst investors around the future path of Bank rate, with investors becoming more optimistic that the Bank of England will lower rates in the years ahead.
These shifts are important as this led to a decline in the longer-term interest rates (swap rates) that underpin mortgage pricing around the turn of the year. However, the partial reversal in recent weeks in response to stronger than expected inflation and activity data cautions that the interest rate outlook remains highly uncertain.
While a rapid rebound in activity or house prices in 2024 appears unlikely, the outlook is looking a little more positive. The most recent RICS survey suggests the decline in new buyer enquiries has halted, while there are tentative signs of a pickup in the number of properties coming onto the market.
The Bank of England is expected to keep its base rate at 5.25% on Thursday but may lower some of its inflation forecasts, which could give it room to start cutting rates from the summer.
Denmark’s Novo Nordisk has reported strong revenue growth, with sales of its obesity and diabetes drugs soaring. Obesity drug sales alone jumped 154% at constant exchange rates to 41.6bn Danish kroner (£4.8bn) last year, fuelled by demand for Ozempic. Sales of diabetes drugs such as Wegovy and Saxenda grew by 52%. Obesity and diabetes sales together totalled 215bn kroner (nearly £25bn).
Overall sales rose 36% to 232bn kroner, while profit before tax jumped 52% to 104.7bn kroner.
For 2024, sales growth is expected to be 18-26% at constant exchange rates, and operating profit growth is expected to be 21-29%.
Lars Fruergaard Jørgensen, president and chief executive, said:
We are very pleased with the strong performance in 2023 reflecting that more than 40 million people are now benefiting from our innovative diabetes and obesity treatments.
Our focus in 2024 will be on reaching more patients, progressing and expanding our pipeline as well as the continued significant expansion of our production capacity.
A judge in the US state of Delaware has annulled a $55.8bn (£44bn) pay deal awarded to Elon Musk in 2018 by the electric car company Tesla.
The lawsuit was filed by a shareholder who argued that it was an overpayment.
Judge Kathaleen McCormick ruled that the Tesla board's approval of the pay package was "deeply flawed."
In a post on X, which is owned by Mr Musk and formerly known as Twitter, he wrote: "Never incorporate your company in the state of Delaware".
The pay deal was the biggest ever in corporate history, helping to make Mr Musk one the richest people in the world.
During the week-long trial, Tesla directors argued the deal was made to ensure that one of the world's most dynamic entrepreneurs continued to dedicate his attention to the company.
But the judge ruled that Tesla and Mr Musk's attorneys "were unable to prove that the stockholder vote was fully informed", and that he had "extensive ties with the persons tasked with negotiating on Tesla's behalf".
"Given the judge found Mr Musk to be in control of the board, it's hard to justify a transaction like this," Brian Quinn, a professor at Boston College Law School, told the BBC.
In a 201-page ruling, Judge McCormick called the compensation "an unfathomable sum" that was not fair to shareholders.
The judge also said the compensation package had been negotiated by Tesla's directors who had been "swept up by the rhetoric" surrounding Mr Musk's "superstar appeal".
Greg Varallo, an attorney for the Tesla shareholder Richard Tornetta who brought the lawsuit in 2018, said it was a "Good day for the good guys," in an email reported by the Reuters news agency.
"While folks are upset about the size of the pay, that should not be the key concern," Ray Wang, founder and chief executive of Silicon Valley-based consultancy Constellation Research told the BBC.
"If the compensation committee would have been properly informed, shareholders would not have a case," he added.
The ruling can be appealed to the Delaware Supreme Court.
Shares in Tesla were down by around 3% in extended New York trade. They have lost more than 20% of their value so far this year.
Mr Musk also posted on X: "I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters". He then posted a poll asking his followers whether or not Tesla should "change its state of incorporation to Texas, home of its physical headquarters".
"That is a question for Tesla shareholders, not his Twitter followers," said Professor Quinn.
"He treats Tesla like his own but even if he calls himself the 'Technoking of Tesla', he is not the majority owner," he added.
As well as being the chief executive and a major shareholder of Tesla, Mr Musk also owns several other companies including the social media platform X, the rocket company SpaceX, and the brain chip firm Neuralink.
Taxpayers ringing the self-assessment phone line on Tuesday were told they could expect to wait for 40 minutes before getting through to an adviser. Many were calling for urgent help with their tax return which must be submitted by January 31 to avoid late penalties.
John O’Connell, chief executive of the Taxpayers’ Alliance, said: “Due to the tax office’s phone delays many may end up being fined for missing tomorrow’s deadline.
“HMRC should recognise the pressures on their systems and extend the deadline for taxpayers that need help.”
HMRC’s typical average wait time is around 24 minutes.
Taxpayers who miss the deadline risk an automatic £100 late filing penalty, with additional penalties for paying outstanding taxes after the deadline.
There is a 5pc penalty on unpaid tax at 30 days, six months and 12 months. Interest, currently at 7.75pc, will also be charged on any late payments of tax.
Sir Jacob Rees-Mogg, the Conservative MP for North East Somerset, said: “No one should be fined for a fault that lies with the Government. It would be fundamentally unjust.”
These allowances usually rise in line with inflation but were frozen by Rishi Sunak in 2021 when he was Chancellor.
Tom Clougherty, executive director at the Institute of Economics Affairs, said that HMRC should grant penalty-free deadline extensions to people caught out.
Mr Clougherty said: “One of the hidden costs of fiscal drag is more people having to trouble themselves filing tax returns.
“I think that a punitive approach from HMRC would be inappropriate in the circumstances. I hope that they will be generous, especially with people who have just crossed the boundary without realising it.
“Clearly, that is not any attempt to evade taxes or pay less tax than they ought to. That is just an honest mistake which is arising from the government freezing tax thresholds to a great degree.”
Taxpayers posted on X, formerly Twitter, saying they needed help with their tax return but had been unable to speak to an adviser on the phone.
One social media user wrote on HMRC’s Customer Support page: “I’ve just been on hold for 53 minutes and the minute you answer you hang up on me! How am I supposed to get an issue sorted with service like this?”
At the end of last year HMRC revealed it would only allow “priority” callers and the “digitally excluded” to speak to a tax adviser on the phone from December 11 until the annual tax return deadline. The move is part of the tax office’s plan to push more taxpayers to use its digital services instead of the phone lines.
Nimesh Shah, chief executive of accountancy firm Blick Rothenberg, said customer service levels were the “worst” he had ever seen.
“I’d be amazed if anyone ringing up can get through in the next 24 hours,” he said.
Harriett Baldwin, chair of the Treasury Committee, an influential group of MPs, said: “People calling the helpline are doing so because they are trying to get their taxes right.
“When we were told there were plans to reduce the phone line capacity to focus on priority callers, I was concerned that this might cause serious issues for well-meaning taxpayers who just want to get answers.
“We will be writing to HMRC to see what impact these operational changes have had on waiting times and late fines.”
HMRC customer service staff numbers dropped from 20,139 to 18,996 in 2023, according to data obtained in a freedom of information request by tax firm RSM.
HMRC said on Tuesday its customer services staff no longer work exclusively in call centres. “We’ve moved to a flexible model where our customer advisers can operate between different channels like webchat, post and calls, as this allows us to react to peaks in demand and deploy staff more efficiently.”
Treasury Committee chair Harriet Baldwin was concerned about plans to reduce the phone line capacity
Credit: JULIAN SIMMONDS
Chris Etherington, of RSM, said: “There is clearly a focus on HMRC trying to maximise the output and efficiency of the resources available to them. However, there is a tipping point where a lack of resources can be demoralising for staff being put under increasing pressure, ultimately leading to more departures.”
Taxpayers have been affected by various customer service issues at the tax authority over the last 18 months. HMRC was grilled by MPs last year after it gave taxpayers just two working days’ notice before closing its self-assessment helpline over the summer.
Helen Thornley, of The Association of Taxation Technicians, said: “These delays form part of a wider picture of concern within the profession that HMRC is under-resourced to deal with all that is being asked of it.
“We worry that HMRC’s desire to push taxpayers towards digital resources will mean some people are left behind, and the services available to taxpayers and professional advisers via digital channels are too often incomplete, disjointed, and poorly designed even for those who can go digital.”
Caroline Miskin, of the Institute of Chartered Accountants in England and Wales, a trade body, said: “Demand is increasing as more taxpayers are drawn into self assessment because of the freezing of tax bands and allowances. This has created compounding pressures of higher demand and a more restricted service offering from HMRC.
“Waiting times are much too long.”
A spokesman for HMRC said taxpayers have 10 months after the end of the tax year to file their returns online.
He said: “Our online services and phone lines are operating as normal, with filing going well ahead of the self-assessment deadline.
“Customers are successfully using our digital services to get the help they need as this is the quickest and easiest way for most, saving people having to wait on the phone. This frees up our expert advisors to help people with urgent and more complicated queries as well as help the small number unable to access our online services.
“Millions of people already sort their taxes online, with more than 80pc satisfied with their experience.”
A judge in the US state of Delaware has annulled a $55.8bn (£44bn) pay deal awarded to Elon Musk in 2018 by the electric car company Tesla.
The lawsuit was filed by a shareholder who argued that it was an overpayment.
Judge Kathaleen McCormick ruled that the Tesla board's approval of the pay package was "deeply flawed."
In a post on X, which is owned by Mr Musk and formerly known as Twitter, he wrote: "Never incorporate your company in the state of Delaware".
The pay deal was the biggest ever in corporate history, helping to make Mr Musk one the richest people in the world.
During the week-long trial, Tesla directors argued the deal was made to ensure that one of the world's most dynamic entrepreneurs continued to dedicate his attention to the company.
But the judge ruled that Tesla and Mr Musk's attorneys "were unable to prove that the stockholder vote was fully informed", and that he had "extensive ties with the persons tasked with negotiating on Tesla's behalf".
"Given the judge found Mr Musk to be in control of the board, it's hard to justify a transaction like this," Brian Quinn, a professor at Boston College Law School, told the BBC.
In her 200-page ruling, Judge McCormick called the compensation "an unfathomable sum" that was not fair to shareholders.
The judge also said the compensation package had been negotiated by Tesla's directors who had been "swept up by the rhetoric" surrounding Mr Musk's "superstar appeal".
Greg Varallo, an attorney for the Tesla shareholder Richard Tornetta who brought the lawsuit in 2018, said it was a "Good day for the good guys," in an email reported by the Reuters news agency.
The ruling can be appealed to the Delaware Supreme Court.
The pay deal was the biggest ever in corporate history, helping to make Mr Musk one the richest people in the world.
Shares in Tesla were down by around 3% in extended New York trade. They have lost more than 20% of their value so far this year.
Mr Musk also posted on X: "I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters". He then posted a poll asking his followers whether or not Tesla should "change its state of incorporation to Texas, home of its physical headquarters".
"That is a question for Tesla shareholders, not his Twitter followers," said Professor Quinn.
"He treats Tesla like his own but even if he calls himself the 'Technoking of Tesla', he is not the majority owner," he added.
As well as being the chief executive and a major shareholder of Tesla, Mr Musk also owns several other companies including the social media platform X, the rocket company SpaceX, and the brain chip firm Neuralink.
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Elon Musk’s Neuralink has attached a computer to someone’s brain, he has said.
Neuralink hopes to build a brain-computer interface that can be implanted in humans. That would allow them to interact with a computer just using their thoughts, and vice versa.
Now Mr Musk says the system has been trialled in a human. Until now, the system has only been tested on animals.
Davos Forum Global Inequality
(Copyright 2023 The Associated Press. All rights reserved)
“The first human received an implant from Neuralink yesterday and is recovering well,” he wrote on X, formerly Twitter.
The system was already detecting activity in the person’s brain, he suggested. “Initial results show promising neuron spike detection.”
Mr Musk gave no further details about the experiment, including who the first recipient was or what the technology involved. After the announcement, he returned to tweeting about gaming.
Neuralink said last year that it had begun recruiting for the first human trials of its technology. At the time, it suggested it was looking for people who “have quadriplegia due to cervical spinal cord injury or amyotrophic lateral sclerosis (ALS)”.
Neuralink was formed in 2016, in the hope of creating a new way for humans to interface with machines. Mr Musk has suggested it could offer a way for people to integrate virtual reality with their own brains, for instance.
Since it was created, Neuralink has remained largely secretive about its work. But it has revealed that it requires a set of small probes that are inserted into the brain to see neuron activity – which may be done by a specially designed robot.
It has also revealed successful tests, including a monkey playing Pong using the system. It has however received criticism over its use of animal testing.
By Faarea Masud & Michael RaceBusiness reporters, BBC News
Getty Images
Slowing prices for tea helped ease inflation in January
Shop prices rose at their slowest rate in more than 18 months in January, according to the latest report from the British Retail Consortium (BRC).
Inflation - the rate at which prices rise - has reached near-record highs in recent times, prompting a cost-of-living crisis.
However, discounts and lower prices for milk and tea saw shop price inflation fall to 2.9%, from 4% in December.
Overall, prices are still going up in the shops but at a slower rate.
On average, food prices are still rising by more than 6% a year.
The BRC, which represents some of the UK's biggest retailers, said shop price inflation in January was at its lowest level since May 2022.
Discounts after New Year also helped to slow down the rate of price increases for non-food products, which eased to 1.3%, down from 3.1% the month before.
However, the BRC warned in its report that many households had not felt the benefit of lower inflation, adding there were risks that price rises could accelerate once more.
Helen Dickinson, chief executive of the BRC, said progress in slowing price rises was likely to be hampered by other cost pressures, including implementing the increase in the National Living Wage, and an increase in business rates in April.
"Rising geopolitical tensions will also add to uncertainty and costs in supply chains. With a general election later this year, we want to see political parties outline how they will help unlock investment across the country, rather than the current trajectory, which is doing just the opposite," Ms Dickinson said.
Dry January
Separate data from research company Kantar said food price inflation fell at a slower rate in January due to fewer people buying promotional items compared with December.
It said some 86 million more lunchboxes were taken to work in 2023 as people sought to manage budgets more closely.
"As consumers across the country took on Dry January, spending on alcohol fell by more than half compared with December, said Fraser McKevitt, head of retail and consumer insight at Kantar.
Almost 6% of beer packs sold in January were no or low-alcohol options, marking a jump from 4% at the end of last year. Sales of own-label plant-based ranges increased by 8% on the month as Veganuary got under way, Kantar said.
Several shipping firms have stopped vessels using the route after the attacks by Houthi rebels in Yemen. Last week, the US and UK launched military strikes against the Houthis.
But Mr McKevitt said: "There's been a lot of speculation about the impact the Red Sea shipping crisis might have on the cost of goods, but the story in the grocery aisles this January is more about the battle between the supermarkets to offer best value, rather than geopolitics.
"Retailers have taken their foot off the promotions gas slightly as we've come into the New Year, and that's meant inflation hasn't fallen as quickly," he said.
He added attention would now turn to Valentine's Day to see if couples opt for more low-key celebrations again, like they did in 2023.
However, although tobacco and alcohol prices remain high, there is some hope that headline inflation could fall to nearer the Bank of England's 2% target as energy bills are predicted to come down in 2024.
The predicted fall in the inflation rate has fuelled hopes that the Bank will cut its key interest rate, which currently stands at a 15-year high.
The Bank has increased interest rates 14 times since December 2021 in an attempt to tackle inflation, which has strained the finances of UK households over the past two years.
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