“You just can’t keep a good man down,” the old saying goes, and with billionaire Elon Musk that certainly appears to be true regarding his finances.
On Tuesday, Delaware Judge Kathaleen St. Jude McCormick ruled for a second time that the Tesla CEO’s 10-year compensation package approved in 2018 and once valued at $56 billion was excessive and the result of him essentially controlling the board of directors, the Associated Press reported.
Some Tesla shareholders had sued in Delaware, where Tesla was incorporated, to block the agreement. In January, McCormick ruled for those shareholders.
However, the compensation plan was then put before all the shareholders in June, and more than 70 percent of them voted to approve it.
Nonetheless, McCormick held Tuesday that the subsequent supermajority vote of the shareholders did not repair what she determined to be a faulty negotiation process in 2018.
“A stockholder vote standing alone cannot ratify a conflicted-controller transaction,” McCormick wrote in her opinion. In other words, the judge said she believes there were conflicts of interest in the compensation negotiation process.
Musk responded to the ruling on his social media platform X, writing, “Shareholders should control company votes, not judges.”
And a post on Tesla’s X account said, “A Delaware judge just overruled a supermajority of shareholders who own Tesla and who voted twice to pay [Elon Musk] what he’s worth.”
Shareholders should control company votes, not judges https://t.co/zRsWGjC2hG
— Elon Musk (@elonmusk) December 3, 2024
“The court’s decision is wrong, and we’re going to appeal. This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders,” the company added.
Is Elon Musk the most intelligent man on the planet?
Meanwhile, the same week Musk was denied his Tesla pay, his aerospace company SpaceX, in which he owns a reported 42 percent stake as of June, is said to have been revalued an additional $140 billion higher by potential investors.
“SpaceX is in talks to sell insider shares in a transaction valuing the rocket and satellite maker at about $350 billion, according to people familiar with the matter, a massive jump highlighting the post-election gains across Elon Musk’s business empire,” Bloomberg reported.
SpaceX was previously valued at $210 billion earlier this year, the news outlet said.
Bloomberg further noted the share price of Tesla, in which Musk held a 13 percent stake, is up 40 percent since Nov. 5.
In October, his Tesla shares went up in value by roughly $26 billion in just one day of trading alone. The price of one share of Tesla’s stock on Thursday was $368.
Tesla just crossed the $356 mark as investors see past Elon’s temporary comp uncertainty by a corrupt judge’s ruling in a strong market driven by strong AI product outlook. pic.twitter.com/8L62urj2er
— AJ (@alojoh) December 4, 2024
According to Bloomberg’s Billionaires Index, Musk’s total wealth has soared to $353 billion, making him far and away the wealthiest man in the world.
It’s worth pointing out that following McCormick’s first ruling against Musk and Tesla, the company shifted its incorporation from Delaware to Texas.
So if Delaware’s supreme court upholds the lower court’s ruling, the Tesla board of directors can simply vote on another compensation package and likely face a more business-friendly judicial system in the Lone Star State.
The AP reported that Musk’s compensation would probably be valued even higher under a new package, since it will undoubtedly include stock options and the price of Tesla stock has doubled in the past six months.
Yep, it’s true: you just can’t keep a good man down.
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