Elon Musk Appeals Ruling Over $100 Billion Tesla Stock Package
Elon Musk, the billionaire entrepreneur and CEO of Tesla, is escalating his legal battle over a massive stock package valued at over $100 billion. Musk has filed an appeal against a Delaware judge's ruling that denied him access to the stock options, which are part of a compensation plan established in 2018.
The controversy began when a group of Tesla shareholders challenged the legitimacy of the stock allocation, arguing that Musk had undue influence over the company's board during negotiations. A year ago, the judge ruled in favor of the shareholders, stating that the allocation was not legally sound and that Musk had not fully disclosed the extent of his involvement to the investors.
Despite this setback, Tesla shareholders reaffirmed their support for Musk's stock package during a recent annual meeting in June, approving the plan once again. This time, the decision was made with more context, as the ongoing legal proceedings brought the issue to greater public attention. However, the judge maintained her stance, rejecting the latest approval.
Musk's legal woes are compounded by his decision to relocate Tesla's headquarters from Delaware to Texas. Nevertheless, this change does not impact the original compensation plan, which allows Musk to acquire approximately 300 million shares of Tesla stock at the 2018 price, contingent upon the company meeting ambitious performance targets. Tesla surpassed these targets significantly faster than anticipated.
Initially, the compensation package was estimated to be worth around $2.6 billion; however, by the time the judge first ruled on the matter, its value had ballooned to $56 billion. In recent months, Tesla's stock price has soared further, driven by investor optimism regarding the company's potential to benefit from Musk's close ties to the forthcoming presidential administration of Donald Trump. Consequently, Musk's wealth has surged, solidifying his status as the world's richest individual with an estimated net worth of $426 billion, according to Bloomberg.
