"Back in 2018, Musk negotiated an unusual pay package with Tesla. He agreed that he would work for the company without taking a salary. Instead, he would receive 12 tranches of stock options. However, the tranches wouldn’t vest immediately. Instead, every time the company’s market valuation increased by $50 billion, a tranche would vest.
Thus, for Musk to achieve his full compensation, the company’s value would have to increase from $50 billion in 2018 to an eventual $650 billion. Both the board and the shareholders (73% of them) overwhelmingly approved the plan because it put all the risk on Elon Musk. ...The company is currently valued at $1.13 trillion. Although Musk’s compensation was envisioned to be about $56 billion, the exploding share price means he could receive as much as $100 billion.
A group of minority shareholders challenged the compensation package. (My understanding is that the lead plaintiff held only seven shares at the time.) In January 2024, Judge McCormick invalidated the entire compensation package, not only stealing Musk’s compensation but also his ownership interest in Tesla ......Elon Musk had better appeal this, and the Delaware appellate court had better think long and hard about the message McCormick sent to the corporations headquartered in that state."
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