A Delaware judge struck down Elon Musk’s $55.8 billion pay package at Tesla, ruling that the compensation process at the publicly traded company was “deeply flawed.” Tesla stock dropped nearly 3% on the news.
Musk’s status as one of the world’s richest men was tied to his stock holdings at Tesla, and it’s unclear how Tesla’s board now plans to compensate Musk. The vesting structure of the pay package, the largest in public corporate history, was meant to keep him focused on Tesla.
The judge’s ruling was in response to a stockholder lawsuit filed five years ago claiming Musk worked out his compensation with friends on the company’s board. His lawyers argued that the performance targets in the package were considered almost unreachable.
Musk can appeal, but he had this to say for now: “Never incorporate your company in the state of Delaware.”
