According to foreign media reports, on January 30th local time, a Delaware judge ruled that Tesla CEO Elon Musk's $56 billion (approximately RMB 402.5 billion) compensation plan was invalid, and the company's board of directors "failed to ensure the fairness of the compensation plan.".
Subsequently, Musk responded on social media that his $56 billion Tesla compensation plan had been rejected, "Never register a company in Delaware.". He also initiated a vote on whether Tesla should change its registered address to Texas.
$55 billion salary plan overturned by court
Is Musk's position as the world's richest man hanging?
According to The Paper, on January 30th local time, a Delaware judge ruled that Tesla CEO Elon Musk's $56 billion (approximately RMB 400 billion) compensation plan was invalid because Tesla's board of directors failed to prove that the compensation plan was fair.
According to foreign media reports, if this portion of the option value is excluded, Musk's net asset value will drop to $154.3 billion, dropping his ranking to third on the global billionaire list. According to the Bloomberg Billionaires Index, Musk has been the world's richest person for most of the past few years, with a latest net worth of $205 billion, but has shrunk by $23.7 billion since 2024.
According to Caixin, according to the ruling of Delaware Court of Equity Judge Kathaleen McCormick, shareholder Tornetta has proven that Musk "controls Tesla" and the process of approving his compensation by the board is "severely flawed.".
McCormick stated that Tesla gave almost no reason in the trial to explain how it achieved the huge rewards in its compensation plan, and Musk had too close a relationship with some board members to truly act independently.
McCormick pointed out that her ruling was because Musk controlled Tesla, not the company's board of directors and shareholders, at least in terms of setting his compensation.
Musk initiates a "move" vote
90% of netizens support
According to The Paper, Musk subsequently responded on social media platform X that his $56 billion salary plan was denied, saying "never register a company in Delaware.". He also added, "I suggest registering a company in Nevada or Texas."
Not only that, Musk also initiated a vote on X, asking netizens to choose whether Tesla should move its registered address to Texas, which is the location of Tesla's headquarters. As of the time of publication, over 340000 people have participated in the voting, of which 90% of netizens support changing their registration location to Texas.
Musk's fans have been expressing their grievances for him. X user "Whole Mars Catalog" posted, stating, "On March 21, 2018, Tesla shareholders approved a $2.6 billion Musk compensation plan. Excluding the votes of the Musk brothers, 73% of shareholders voted in favor. It is unreasonable for our vote to be overturned by the court." He also shared screenshots of media reports from that year to prove that what he said is true. Musk responded, "Indeed."
According to the Securities Times, on January 15th local time, Musk stated that if he had 25% voting control, it would mean he had a significant influence. But under the current equity structure, if the number of shareholders who vote against is twice that of those who vote in favor, he will be sidelined, and a 15% or lower affirmative vote can overturn his decision, making it easy for the company to be acquired by other interest groups. "Developing Tesla into a leading enterprise in artificial intelligence and robotics, but I don't have 25% control, which makes me uncomfortable. (My current equity) The influence is big enough, but not enough to make me unable to be overthrown. In addition, Musk also said that unless control increases to 25%," I am more inclined to build products outside of Tesla. ".
Musk also expressed his desire to adopt a dual class voting structure to achieve this goal, but he is uncertain whether this structure can be achieved in the state of Delaware where Tesla is located.
Daily Economic News is a comprehensive collection from The Paper, Caixin News, and Securities Times