WILMINGTON, DE – A shocking ruling by a Delaware judge has nullified the colossal $55 billion compensation package of Tesla CEO Elon Musk. The decision comes after a group of shareholders filed a lawsuit, arguing that the wealth awarded to Musk was excessive for a single person.
Judge Kathaleen McCormick, who presided over the case, described Musk’s remuneration as “an unfathomable sum,” asserting it was unjust to the shareholders. If left unchallenged, this decision could significantly impact Musk’s net worth, potentially affecting his other business ventures, including SpaceX and his digital platform, previously known as Twitter.
The ruling also underscores the ongoing tension between Musk and some of Tesla’s shareholders, a relationship that has been strained by Musk’s unpredictable behavior and various controversies in recent years. This tension escalated following Musk’s controversial acquisition of Twitter, which required him to sell billions of dollars worth of Tesla shares.
The disputed payout traces back to 2018 when Tesla entered a decade-long agreement with Musk. Initially, the package was estimated to be worth approximately $2.284 billion, based on the company’s share value at the time. However, with Tesla’s shares reaching record highs in 2021, the value of the package has skyrocketed, making it the largest in US corporate history, according to Reuters.
As per Forbes, Musk’s net worth currently stands at $183.4 billion, with the $55.8 billion package constituting about 30 percent of it. Law professor Adam Badawi from the University of California, Berkeley, told Reuters that the ruling, if upheld, would significantly impact Musk’s wealth.
Musk, understandably, is upset with the decision. He took to Twitter to express his dissatisfaction, emphasizing that the shares from the package could not be sold for five years, making it impossible for him to “exercise and run.” Legal experts anticipate that Musk will challenge the ruling in court.
The timing of the ruling could not be worse for Musk, as Tesla recently failed to meet its Q4 targets in 2023. Additionally, Musk has been accused of pressuring shareholders by threatening to explore other AI ventures unless he received a 25 percent voting control, a 12 percent increase from his current position.
Musk’s reaction to the judge’s decision has been fiery, with the CEO venting his frustrations on social media, advising against incorporating companies in Delaware.