Why the world's richest man is fighting for his salary
Tesla CEO Elon Musk wrote on X after a judge ruled on Monday that Musk is not entitled to receive a $56 billion compensation package. The ruling came despite shareholders of the electric vehicle company voting in June to reinstate Musk's pay package which was thrown out by the same judge in January.
The rulings came in a lawsuit filed by a Tesla stockholder who challenged Musk’s 2018 compensation package. The compensation package initially carried a potential maximum value of about $56 billion, but that sum has fluctuated over the years based on Tesla’s stock price.
How was Musk's compensation structured?
Musk's 2018 pay package was based on the idea that he would get all the options only if Tesla’s stock price soared and its sales and earnings grew strongly. His compensation package created 12 tranches of options — each equivalent at the time to 1% of Tesla's outstanding shares — potentially giving him a 12% stake in the automaker. Musk would receive no salary. Under the 10-year deal, Musk was eligible to win an options tranche every time Tesla hit a series of up to 12 targets. Those targets were tied to increases in Tesla's market capitalization in $50 billion increments, and to aggressive hurdles for revenue and EBITDA growth. Musk went on to hit all 12 targets when few had expected him to, given the various struggles of Tesla at that time. He still owns the options. The package is now worth $100 billion after Tesla’s share price jumped sharply in recent weeks.
How Tesla shareholders voted
While the potential
