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Is Musk's position as the world's richest man hanging? $55 billion sky high salary plan overturned by court

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Tesla CEO Elon Musk has just received bad news, which could jeopardize his position as the world's richest person.
On Tuesday, a Delaware judge declared Musk's $55 billion compensation plan invalid, ruling that Tesla's board of directors failed to prove that the compensation plan was "fair.".
Previously, Tesla shareholder Richard Tornetta filed a lawsuit against the court, claiming that Musk's $55 billion salary was too high. The shareholder also stated that Musk influenced the board's decision to develop his compensation plan through close personal relationships with board members (including his brothers).
According to the ruling of Delaware Court of Chances Judge Kathaleen McCormick, Tornetta has proven that Musk "controlled Tesla" and the process of approving his compensation by the board was "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 depends on a finding that Musk controls Tesla, not the company's board of directors and shareholders, at least in terms of setting his compensation.
Musk currently holds approximately 13% of Tesla's shares directly. Earlier this month, Musk stated that he hoped to obtain 25% of Tesla's voting rights to ensure sufficient influence within Tesla, otherwise he would rather build AI products outside of Tesla.
McCormick also wrote in the ruling that the plaintiff and defendant will consult on the form of the final order to execute this ruling and submit a joint letter to determine all issues, including the cost issues that need to be resolved, in order to resolve the matter during the trial phase.
After the ruling was announced, Tesla's stock price plummeted by more than 3% in after hours trading on Tuesday. During regular trading hours, Tesla's stock price rose slightly by 0.35% to close at $191.59, with a total market value of $600.3 billion.
Regarding the judge's ruling, Musk responded on social media late Tuesday afternoon, "Never register a company in Delaware.".
Is Musk's status as the richest man hanging?
The CEO compensation plan awarded by Tesla in 2018 was the largest compensation plan in the company's history, which helped Musk become a billionaire and the wealthiest person on Earth. Musk not only owns Tesla, but also many well-known companies such as SpaceX, Solar City, and Neuralink.
According to this compensation plan, if Tesla achieves specific financial goals, Musk will unlock option rewards in batches. Tesla confirmed in early 2023 that Musk had received the final remaining options granted to him under the 2018 compensation plan.
The latest ruling means that Tesla will need to draft a new compensation plan for Musk, although the company can appeal. This also means that a portion of Musk's wealth is now in uncertainty.
According to the Bloomberg Billionaires Index, Musk's latest net worth is about $204 billion, reclaiming the top spot on the global billionaire list. Most of this wealth comes from his ownership of Tesla shares.
Musk has already fully received all option rewards, with a total value of over $55 billion. If this portion of assets is excluded, his net asset value will drop to around $150 billion, dropping his ranking to third on the global billionaire list.
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