Elon Musk’s fate and wealth are hanging in the balance as Tesla shareholders prepare to vote on whether to re-approve his $50 billion pay package on Thursday. The package, awarded in 2018, would send Musk’s net worth soaring or sinking by tens of billions of dollars. The Delaware judge voided the award in January, stating that it was the largest potential compensation opportunity ever seen in public markets. However, the matter is not likely to be resolved soon, as a lengthy appeal process is expected to follow the shareholder vote.
Forbes has discounted the value of Musk’s pay package by 50% due to the uncertainty surrounding the situation, including the possibility of an appeal of the Delaware ruling. Regardless of the shareholder vote’s outcome, most of that uncertainty will remain unresolved, leaving Musk with an estimated $25 billion pay package. Tesla argues that if shareholders vote to re-approve the award, the issues with the 2018 grant will be resolved. However, legal experts believe that the vote may not cure the original problems identified by the Delaware judge.
If shareholders vote against re-approving the award, Musk and Tesla could appeal the Delaware ruling by arguing that the original approval process was fair. Alternatively, they could propose a replacement pay package of lesser value to keep Musk invested in the company. Despite the legal challenges that may arise, experts believe Tesla and Musk could still end up with a substantial pay package of around $30 billion. Musk’s other ventures, including his new artificial intelligence startup xAI, could also impact his financial situation.
In a more extreme scenario, Musk could sue Tesla for restitution to obtain the fair value of his services. The ultimate amount that Musk will receive remains uncertain, but Forbes estimates that it will be enough for him to maintain his position as the world’s richest person. The legal battle surrounding Musk’s pay package highlights the complexities of executive compensation and corporate governance, with experts offering differing opinions on the potential outcomes. As shareholders prepare to cast their votes, the future of Musk’s fortune hangs in the balance.
