US court restores Musk's 2018 Tesla pay package boosting his control stake
New Delhi, Dec 20
The Delaware Supreme Court in the US has restored Elon Musk’s 2018 pay package from Tesla, overturning a lower‑court decision that had struck it down as “unfathomableâ€.
The ruling reverses a 2024 decision that rescinded the package and found that total rescission “leaves Musk uncompensated for his time and efforts over a period of six years,†the 49‑page ruling said, according to multiple media reports.
The erstwhile ruling had reportedly damaged Delaware's business-friendly reputation, and the new ruling assured Musk greater control over the company, alleviating his main concern, even after shareholders recently approved a new pay package that could be worth $878 billion if Tesla meets certain ‌targets.
The 2018 package is now worth about $139 billion based on Tesla’s closing stock price on Friday, and if Musk exercises all stock options from the pay package, his stake would rise from about 12.4 per cent to 18.1 per cent of an expanded share base.
Musk posted on social media platform X that he was “vindicated,†while lawyers who challenged the pay package were cited as saying they were considering next steps and were proud "calling to account the Tesla board and its largest stockholder for their breaches of fiduciary duty.â€
The 2018 pay deal provided Musk options to buy about 304 million shares at a discounted price if Tesla met specific milestones. Tesla's board had warned that Musk, the world's â€richest person, leading the SpaceX rocket venture, could leave the electric car company if his pay was disrupted.
He had recently defended the H-1B visa programme, saying that the US economy has benefited immensely from Indian immigrants.
Musk said that America needs high-skill workers from India now more than ever, while also calling out the misuse of the visa system by some outsourcing firms. Musk said America has been an immense beneficiary of talent from India, adding that his companies constantly struggle to fill specialised roles because there is always a scarcity of talented people.
— IANS
Reader Comments
$139 billion... just let that number sink in. While he talks about talent scarcity, I wonder how many engineers that money could train or support here in India. The wealth gap is mind-boggling.
His praise for Indian immigrants is appreciated, but it feels a bit convenient. The H-1B system has its flaws, as he pointed out. Hope this leads to more genuine opportunities for skilled Indians abroad, not just cheaper labour for companies.
As a shareholder, I'm relieved. The uncertainty was bad for the stock. Musk's vision is what drives Tesla. If he left, the company would suffer. This stability is good for everyone invested.
Respectfully, I have to disagree with the ruling. No single person's "time and efforts" are worth hundreds of billions. It sets a terrible precedent for corporate governance, even if he is a genius. The board's duty is to all shareholders.
Interesting to see the US court protecting its "business-friendly" reputation. Meanwhile, his comments on Indian talent are a double-edged sword. We need to create more opportunities here so our best minds don't *have* to leave.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.