Elon Musk's $US56 billion Tesla payday denied, again – report
12/02/2024 07:54 PM
One of the largest pay packages in history has been denied to Tesla CEO Elon Musk, despite receiving the approval of company stockholders.
Tesla CEO Elon Musk’s $US56 billion ($AU86.5 billion) pay package has been rejected by a court in the US.
Despite winning the support of the majority of Tesla shareholders, the judge denied the pay – calling it excessive – and upheld a January 2024 ruling to block the CEO’s pay, Reuters reports.
The Delaware judge decided against the 2018 deal earlier this year, ruling the burden of proof lay on Tesla’s board of directors to prove the compensation deal was fair – “and they failed to meet their burden,” she said at the time.
As reported in June 2024, Tesla shareholders voted to uphold the package for the company CEO – with 84 per cent (excluding Musk and his brother) re-approving the deal.
On Monday, the judge upheld her earlier ruling, denying the motion to overturn the decision from January.
The lawsuit was brought by a shareholder of the company, with Tesla ordered to pay $US345 million ($AU533 million) to the plaintiff’s attorneys – either in cash or stocks.
The Tesla CEO – and one of the wealthiest people in the world – takes no salary from the business, but instead receives discounted stock in the company if certain performance targets are met.
The deal was struck in 2018 and approved by shareholders at the time, and confirmed again in the June 2024 vote.
The stock options were initially worth $US2.6 billion ($AU4 billion), but soared to $US56 billion.
The $US56 billion packet is believed to be the largest compensation package in US history for an executive of a public company – but it could now be worth as much as $US101.4 billion ($AU156.6 billion), according to Reuters.
Musk is understood to currently own $US150 billion ($AU231.7 billion) worth of Tesla stock.
Like many companies in the US, Tesla was registered in Delaware as the state doesn’t have income tax for corporations.
After the judge’s first ruling in January, Musk took to X – the social media network owned by Musk, formerly known as Twitter – to express his sudden dislike of Delaware, moving Tesla’s company registration to Texas shortly after.
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