The Delaware Supreme Court reinstated a vast compensation package awarded to Tesla CEO Elon Musk in 2018, which had been voided twice by a lower court judge.
The package bestowed upon Musk an option to purchase 303 million split-adjusted shares, a bundle valued at $139 billion based on Friday’s closing stock price. The Chancellor of the Delaware Court of Chancery, Kathaleen McCormick, who oversaw the trial, concluded that despite Tesla shareholders twice approving the compensation plan, the package’s magnitude was inequitable toward the shareholders.
She stated that the Tesla board of directors “assumed the burden of proving the fairness of the compensation plan and failed to meet its burden.”
Even after shareholders re-voted for the package, McCormick rejected it a second time as unfair.
However, the Delaware Supreme Court ruled on Friday that the lower court erred in its opinion, deeming the voiding of the 2018 pay package “improper,” and that it “leaves Musk without compensation for his time and effort over six years.”
Musk is already the wealthiest person globally, with an estimated net worth of $644 billion, per the Bloomberg Billionaires Index. A significant portion of this fortune comes from the 413 million Tesla shares he fully owns, worth $199 billion at Friday’s price. Tesla shares are near an all-time high reached earlier this week.
He was recently awarded a new pay scheme by Tesla that could be worth $1 trillion if Tesla’s stock value appreciates as strongly as he and the company anticipate.
And Tesla is only part of Musk’s net worth. He is also the main shareholder of SpaceX, a firm he plans to take public next year at a valuation that will also substantially boost his wealth.
“Thanks for your unwavering support,” Musk replied on X Friday evening, responding to someone writing about the Delaware Supreme Court’s ruling.
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