Elon Musk is at risk of losing his remuneration package of more than 50 billion USD

The court in Delaware said that the huge remuneration package that Tesla gave to CEO Elon Musk was unfair to shareholders. A judge in Delaware today ruled to invalidate the record remuneration package worth more than $50 billion that electric car company Tesla gave to CEO Elon Musk. She believes that this remuneration package is an "unbelievable number" and unfair to shareholders. At Tesla, Musk does not receive a direct salary or bonus. According to an agreement with shareholders in 2018, he will receive an income package including options to buy 304 million shares until 2028, if Tesla meets its business results and capitalization goals.
Currently, Musk has received all 12 options. However, he hasn't made any choices yet. After implementation, the billionaire will have to hold these shares for 5 years before selling. Musk's purchase price was $23.33, much lower than the closing price of $191.59 for Tesla shares on January 30.
Judge Kathaleen McCormick at the Delaware State Court of Justice said that Tesla's Board of Directors members are all people close to Musk, or do not have independent opinions on this remuneration package. The electric car company's Board of Directors currently consists of 8 members, including Musk. "These people believe in Musk's optimistic statements, or are overwhelmed by Musk's popularity. They never wonder whether a compensation package of more than $50 billion is really necessary to retain Musk and achieve success. business goals or not," McCormick said. Tesla's Board of Directors has been criticized for not being able to supervise the CEO who is famous for being impulsive, prone to gossip and aggressiveness. Musk has repeatedly confronted US officials and got the companies he runs into trouble
The above lawsuit was initiated in 2018, by Tesla shareholder Richard Tornetta. Tornetta's lawyer said Tesla's Board of Directors never told shareholders that Musk's targets were so easy to achieve. In November 2022, during a week-long hearing, Musk said he would use the remuneration to fund the space project. "There is a way to send humans to Mars. Tesla can help achieve that," he said. Tesla's Board of Directors believes that they pay at this level to ensure that Musk devotes himself to the company. Antonio Gracias - member of Tesla's Board of Directors from 2007 to 2021 called this package "a great deal for shareholders". Musk's remuneration package is considered the largest in American corporate history. This number is equivalent to 25% of his assets, according to Forbes calculations. Musk is currently the richest person in the world, with $210.6 billion.
Tesla can appeal the above ruling to the Delaware Supreme Court. The ruling comes at a time when Tesla warns of slowing growth. The electric vehicle industry is also reassessing demand. Tesla has become the world's most valuable car company under Musk. However, much of this value is based on expectations of future disruptive technologies, such as robotaxi. Tesla shares fell 2% in after-hours trading after the ruling. Some investors hope this will help the electric car company reform its management.