Court blocks Elon Musk's $55 billion compensation package

Court blocks Elon Musk's $55 billion compensation package

Tesla will have to prepare a new pay package for CEO fees; Musk is in danger of losing his status as the richest man in the world

Justice This Tuesday (January 30, 2024), the state of Delaware (USA) canceled the bonus package worth US$55.7 billion (R$221.4 billion) from the electric vehicle manufacturer. Tesla To Elon Musk, the company's CEO. The information is from Wall Street Journal.

The judge in the case argued that the defendants, Musk and Tesla, could not justify the payment amount the company proposed to the CEO in 2018. The decision could jeopardize Musk's position as the world's richest man.

On his profile on X (formerly Twitter), Elon Musk reaction to the court's decision. “Never incorporate your company in Delaware.”declared.

Owner of Company classification By Bloomberg. The billionaire's wealth fell by $138 billion in 2022, the year he bought Twitter, and ended the year worth $232 billion (1.1 trillion Brazilian reals).

The values ​​were updated by Bloomberg throughout January. On January 30, Musk's wealth was assessed. In the amount of 205 billion US dollars (1 trillion Brazilian reais), related to the company achieving targets in 2018. One investor questioned the bonus and claimed that the bonus package was not transparent about the targets required of the billionaire.

Understands

Tesla proposed a compensation package for the company's CEO in 2018. For every goal achieved – out of a total of 12 – the billionaire received 1% of the company's shares. Therefore, he currently owns 13% of the company's shares.

The compensation package has prompted the electric car maker's shareholders to question Elon Musk's authority over Tesla's board of directors. According to other investors, the billionaire was going to use his influence to dictate the contract that was approved in 2018.

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like him, Shareholder Richard Tornetta asked the court to void the pay package. This process, which can still be resumed, has been ongoing since then.

During the trial of the case in 2022, Both defendants defended themselves by saying that the bonus package ensured that the businessman would help the company during a critical period.

They also claimed that paying the CEO the fee allowed shares to increase due to Musk's greater focus on the company.

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About the Author: Camelia Kirk

"Friendly zombie guru. Avid pop culture scholar. Freelance travel geek. Wannabe troublemaker. Coffee specialist."

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