The ruling will severely damage Musk's fortune and throw the fate of his companies into question.
Tuesday's ruling could wipe out Elon Musk's vast fortune. File photo: Reuters
The ruling was a rejection of the largest compensation package in American corporate history. The judge who issued the ruling found that the package was negotiated by board members who appeared to be influenced by Musk, as well as by a promise that he would share in the company’s meteoric growth.
“Overwhelmed by the ‘only growth’ rhetoric, or perhaps blinded by Mr. Musk’s star power, the Tesla board never asked the question about the $55.8 billion compensation package: Was it necessary for Tesla to retain Musk and achieve its corporate goals?” Judge Kathaleen McCormick of the Delaware Chancery District Court said.
Billionaire Elon Musk says he needs a larger stake in Tesla to maintain control of the electric carmaker and expand further into artificial intelligence.
Elon Musk’s fortune has dropped by $30 billion this year, to just under $200 billion, according to Bloomberg. The ruling casts uncertainty over the future of Musk’s fortune, as the option package is one of his most valuable assets.
Without them, his net worth would drop to $154.3 billion, making him the third-richest person in the world after holding the No. 1 spot for the past few years, according to the Bloomberg Billionaires Index.
Billionaire Musk was quick to respond to the ruling on social media X: “Never incorporate your company in the state of Delaware.” It is unclear whether Musk will appeal Tuesday’s ruling or whether Tesla’s board will come up with a new pay package.
Mai Anh (according to AP, Reuters, SCMP)
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