Musk risks losing world’s richest title after court voids $83b pay
Thursday, 01 February, 2024, 11:48
Elon Musk’s $US55 billion ($83.3 billion) pay package at Tesla was struck down by a Delaware judge after a shareholder challenged it as excessive, a ruling that would take a giant bite out of Musk’s wealth if it survives a likely appeal.
The decision on Tuesday (Wednesday AEDT) means that more than five years after the electric car maker’s co-founder was granted the largest executive compensation plan in history, Tesla’s board will have to start over and come up with a new proposal.
The ruling leaves the future of Mr Musk’s fortune in limbo. Worth some $US51.1 billion, the options were one of his most valuable assets. Without them his net worth would drop to $US154.3 billion, making him the third-richest person in the world after spending most of the past couple of years as No. 1, according to the Bloomberg Billionaires Index.
Following a trial that started more than a year ago, Delaware Chancery Court Chief Judge Kathaleen St. J. McCormick sided with an investor who complained that the 2018 package didn’t have proper disclosures about the performance benchmarks required of Musk and that the board had conflicts of interest in approving it.
Mr Musk, 52, has topped Bloomberg’s wealth list thanks to his stake in Tesla, the world’s most valuable auto company. The stock options from his compensation plan have vested in increments over the past few years as performance targets have been achieved, but he hasn’t yet exercised any of the options, regulatory filings show.
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