Elon Musk’s $139 Billion 2018 Pay Package Restored After Legal Victory
The Delaware Supreme Court has reinstated Elon Musk’s substantial 2018 pay package, which had faced legal challenges that led to its invalidation twice by a lower court. This pay package includes the option for Musk to purchase 303 million split-adjusted shares, now valued at approximately $139 billion based on recent Tesla share prices.
Background on the Pay Package
The Tesla board presented this compensation plan, which received shareholder approval on two separate occasions. However, Chancellor Kathaleen McCormick of the Delaware Chancery Court determined that the pay package was unfair to shareholders. She noted that the burden of proof lay with the board to demonstrate the compensation’s fairness, which they failed to establish.
Legal Findings
Despite repeated shareholder support, McCormick rejected the package as unjust during her review. In a recent ruling, the Delaware Supreme Court determined that the lower court’s decision was misguided. The court described the nullification of the 2018 pay package as “inequitable,” asserting that it effectively left Musk without compensation for his extensive contributions over the past six years.
Musk’s Wealth and Tesla’s Success
As the world’s wealthiest individual, Elon Musk boasts an estimated net worth of $644 billion, according to Bloomberg’s billionaire tracker. A significant portion of this wealth is attributed to his direct ownership of 413 million Tesla shares, valued at around $199 billion at current market prices. Tesla’s stock has recently approached record highs, enhancing Musk’s financial portfolio.
Future Prospects
Musk is poised to receive an additional pay package from Tesla, projected to potentially reach $1 trillion if stock values rise as anticipated. Furthermore, Musk holds substantial interest in SpaceX, a venture he plans to take public next year, which could further augment his wealth.
In response to the Delaware Supreme Court’s ruling, Musk expressed gratitude towards his supporters via a post on X. The developments surrounding this case underscore the complexities of executive compensation and shareholder interests within the fast-evolving landscape of corporate governance.
