It’s great to be rich, but it’s better to be happy. However, what does one do when these are interdependent? One can ask billionaire Elon Musk, the world’s richest man, who may soon lose that position after dominating for most of 2023. He seemed invincible, with a net worth of $205 billion, but things could change soon. He will still be immensely wealthy but at a loss of a $55 billion pay package. A Delaware judge struck down the Tesla CEO’s massive compensation package after shareholders sued to block it, according to The Verge.
Should Tesla change its state of incorporation to Texas, home of its physical headquarters?
— Elon Musk (@elonmusk) January 31, 2024
The Delaware Court of Chancery’s ruling threatens Musk’s fortune if it survives an appeal, Bloomberg reports. Without the options in that package, Musk could drop to being only the third-richest man in the world, making way for centibillionaires Jeff Bezos ($184 billion) and Bernard Arnault ($185 billion) to claim the throne. Musk is not on Tesla’s payroll. However, the package revolved around 304 million stock options in 12 tranches tied to a series of goalposts around the carmaker’s financial growth, as Business Insider previously reported.
Tesla shareholder Richard Tornetta sued Tesla and Musk over the pay plan, terming it beyond the bounds of reasonable judgment. ‘Defendants were unable to prove that the stockholder vote was fully informed because the proxy statement inaccurately described key directors as independent and misleadingly omitted details about the process,’ Judge Kathaleen McCormick wrote in her decision. ‘The defendants proved that Musk was uniquely motivated by ambitious goals and that Tesla desperately needed Musk to succeed in its next stage of development, but these facts do not justify the largest compensation plan in the history of public markets,’ she added.
Greg Varallo, an attorney for Tornetta, stated the shares would be canceled, however, Tesla can still appeal the ruling. Meanwhile, Musk was busy posting his thoughts on Twitter (X), writing, ‘Never incorporate your company in the state of Delaware.’
