How can the deal that made Elon Musk the world’s richest person be revealed?

salary of 56 billion US dollars What Elon Musk received from Tesla – described as an “immense amount” by judge delaware Who rejected it on Tuesday – he was the cornerstone of the eccentric’s meteoric rise ceo Promoting bold bets to explore the universe, digitalize the human brain, and achieve “real status” to become the richest person in the world Twitter,

Now, I may have to give it all back.

This is what legal experts say musk He will likely be forced to give back at least some of the secured stock options as part of his 2018 pay package, an award that was — and still remains — of unprecedented scope.

“This plan represents the largest potential offset opportunity ever seen in the public markets by several orders of magnitude,” the chancellor wrote. Kathleen McCormick.“33 times larger than the plan’s closest comparison, which was the previous compensation plan musk“He added.

It doesn’t matter how much I have to sacrifice musk To fulfill his many other ambitions, he could always rely on additional shares in attractive packages Tesla They were just around the corner. Now, legal experts say, McCormick’s decision will certainly force the company to prepare a comeback plan. musk Your stock options.

wall Street He still hasn’t understood the gravity of the decision.

This could be “a watershed moment in history” TeslaDaniel Ives, managing director of Wedbush Securities, But “the board,” he added, “certainly is not going to sit back and let a Delaware court decide the future of the company.”

Late Wednesday night, musk announced in x That “Tesla will take immediate steps to hold a shareholder vote to transfer the company’s incorporation”. delaware To texasHome of its physical headquarters, following a survey of users x came out clearly in favor of texas,

decision of delaware hard times come for musk, your participation Tesla It now stands at around 13%, which is significantly lower than the around 22% that controlled when the compensation plan was approved.

It has declined because they sold shares to cover tax bills and other financial obligations since their purchase. Twitter For US$44,000 million in 2022.

During this, Tesla — which became the world’s most valuable automaker in 2020 — faces new challenges, including stagnant revenues due to sharp price cuts and the possibility of softening demand for its electric vehicles.

musk You face more than financial loss. The country’s main commercial court ruled that board members Tesla They were “indebted” to him in a flawed compensation process in which he had great influence. This sentence attacks his power, his prestige and his carefully constructed image as a brash but brilliant businessman and strategic genius.

In 2018, musk Helped arrange a compensation package that put him on the path to becoming the world’s richest person. The package was composed of stock options at the time it was owned x As long as the company continued to meet performance-based targets, he owned about 22% of the company’s shares.

With a maximum value of about $56 billion, the plan is “the largest potential clearing opportunity ever seen in the public markets” by a significant margin, he said. McCormick In your decision.

“This ownership stake gave them every incentive to pursue Tesla At transformational growth levels,” he wrote, noting that “Musk could make more than $10 billion for every $50 billion” the company has posted “market cap growth.”

McCormick Said musk used its “extreme influence” on TeslaHe drew on his personal relationships with the board members who approved it, including a longtime friend and his former divorce lawyer, to shape the package.

The judgment describes the technology leader as an “exemplary superstar CEO” who “enjoyed close relationships with directors charged with negotiating on behalf of the directors.” Tesla, and dominated the process that led to board approval of his compensation plan. McCormick said in his decision that the result was a “deeply flawed” process.

In addition, performance milestones established in the agreement were to be compensated musk To achieve “ambitious performance targets”. But in reality the objectives were conservative, the judgment said, rewarding the businessman for growth that was in line with his expectations. Tesla,

“It is unclear how the company’s management reconciled its views that the milestones were both “risky” and “ambitious” and, at the same time, had a greater than 70% probability of occurring,” the decision said.

According to Anat Alon-BeckAssociate Professor of Law Case Western Reserve Universitythe options they have musk and board of directors Tesla They are complex and carry a lot of baggage.

They could appeal the verdict, he said, but given the evidence they were unlikely to succeed. Therefore they may have to form a new special committee with proper independence musk and prepare a new compensation package to replace the compensation canceled by the award.

The technology giant asked his followers x if i should transfer Tesla Outside delaware, The survey results show mostly yes. But alone-bake He said his transfer would be an uphill battle.

Shareholders prefer that public companies be incorporated in delaware Because the state’s policies are very favorable to corporations and their shareholders, including low taxes, greater privacy, and courts specifically dedicated to corporate cases.

“It’s like Hotel California,” he says. alone-bake Of Delaware. “You can check in, but you can never leave.” Still, Tesla shareholders are extremely loyal musk, Any request you make is likely to be taken seriously.

Meanwhile, any appeals will come in Delaware Supreme Courtwho can confirm or reverse the decision of McCormick, However, a decision in its favor is unlikely muskSaid Ann LiptonAssociate Professor of Law Tulane UniversityThe court may send the case back to McCormick to review the reasoning behind some of his findings.

“There have been tests where everything was thrown back but they tried again,” he said.

salary package of Tesla Helped increase the net worth of Elon Musk Up to approximately US$200,000 million, making him the richest person in the world. If he is forced to repay the stock grants, his wealth will decline significantly, causing him to fall out of the top spot.

But that won’t necessarily have a direct impact on his net worth. Since most of their assets are linked to valuation TeslaThe potential impact on the company’s share price could cause its net worth to fall by more than the $56 billion value of the options.

But he won’t be destitute: Musk still has significant assets in the form of his other stock holdings. TeslaAnd his ownership in several other companies includes spacex And boring company Musk made his fortune very quickly paypalOf which he was the co-founder. They earned US$165 million from their sale to EBAY,

musk invested in Tesla in 2004, a year after its founding, and became its CEO in 2007. His space exploration company, SpaceX, is worth about $180 billion, according to cnbcAnd musk Owns approximately 42% of the company.

advice of Tesla Now he is in the uncomfortable position of overseeing and running the company muskDespite the fact that some of its members are considered very close to the CEO. Legal experts say the board may be asked to approve a new pay package for Musk that would not put him in the same legal position.

Legal experts said it would be difficult to follow through. Still, Musk remains popular with many investors, and some experts believe he is likely to be paid in some way.

“I think he’s going to find a way to get most, if not all, of it,” said Gene Munster, managing partner of Deepwater Asset Management. “There will probably be some kind of arrangement to accomplish this.”

But this decision may put the plan in jeopardy musk To gain more control over Tesla.

As it considers future compensation packages for them, the board “will likely be punished by this decision,” said Andrew Jennings, an associate professor. Emory University School of Law,

musk It is famous for its lack of liquidity: most of its money is invested in stocks or shares of private companies. Stocks are valuable not only because of their monetary potential, but also because you can use them to take out personal loans and make other investments.

There have been occasions when a businessman has invested more than half of his shares. Tesla As collateral for the loan. he was able to buy Twitter because he used verbs Tesla To support its $44 billion bid, which was also backed by a $13 billion loan.

but losing options Tesla all bets can be placed musk, causing the company’s share price to decline and jeopardizing its ability to meet its financial commitments. It is now estimated that

“You’re dealing with very thin margins and a very small network,” he said. Eric TalleyProfessor of Law and Co-Director of Milstein Center at Columbia University,

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