Elon Musk adds to his $679 billion fortune after Delaware court awards him $55 billion pay package

Besides increasing Musk’s current wealth of $679 billion, the restoration of the 2018 pay package demonstrates his firm belief that Delaware’s legal system overstepped its bounds in January 2024 when counsel Kathleen St. Jude McCormick overturned compensation in a case brought by a disgruntled Tesla shareholder.

Tesla did not immediately respond to a request for comment late Friday.

The McCormick ruling so enraged Musk that it prompted him to reject Delaware and reincorporate Tesla into Texas. The decision also caused Tesla’s board to scramble to find ways to keep its CEO happy, including a successful effort to persuade the company’s shareholders to reaffirm the pay package, which was worth $44.9 billion at the time of the second vote 18 months ago.

With Musk continuing to show discontent, Tesla upped the ante again this year by crafting another pay package that could pay him $1 trillion if he can lead the automaker on a path over the next decade that raises the company’s market value from its current value of $1.6 trillion to $8.5 trillion. Shareholders approved the pay package last month, much to Musk’s delight.

This may seem like a difficult task, but it also seems like a long shot for Musk to meet all the goals to qualify for the bonus provided in the 2018 package. At the time, Tesla was still struggling to expand its electric car production and burning cash.

At the time the 2018 pay package was drawn up, Tesla’s market cap was between $50 billion and $75 billion. But then the manufacturing problems the company faced eased, enabling it to begin meeting the growing demand for its cars, which in turn led to an increase in its sales and the price of its shares to a level that qualifies Musk to receive the large compensation he promised.

But based on evidence that included Musk’s testimony during the 2022 trial, McCormick ruled that the pay package was set by a board that was too accommodating and beholden to the hard-line Musk.

In its 49-page ruling, the Delaware Supreme Court pointed out a variety of errors in McCormick’s 2024 decision and declared that the 2018 pay package should be restored. It also awarded Tesla $1 in nominal damages.