The decision reinstated stock options worth about $139 billion, propelling Musk’s fortune to roughly $749 billion, according to the Forbes billionaires index.
Elon Musk vaulted into uncharted financial territory on Dec. 19, becoming the first person in history to amass a net worth exceeding $700 billion after a Delaware court reinstated a massive Tesla compensation package that had been voided last year.
According to the Forbes billionaires index, Musk’s fortune surged to about $749 billion after the Delaware Supreme Court restored Tesla stock options now valued at roughly $139 billion. The ruling reversed a lower court decision that had struck down Musk’s 2018 pay package as unfair to shareholders.
Musk, the chief executive of Tesla, had already crossed another milestone earlier this week, when his net worth briefly surpassed $600 billion amid reports that his aerospace company SpaceX could pursue an initial public offering.
The court decision cements Musk’s position far ahead of the world’s next-wealthiest individuals. His fortune now exceeds that of Larry Page, co-founder of Google, by nearly $500 billion, according to Forbes.
Court Reverses Lower Ruling
In a 49-page opinion issued on Dec. 19, the Delaware Supreme Court ruled that a January 2024 decision by the state’s Chancery Court improperly rescinded Musk’s pay package and treated him inequitably. The high court identified what it described as multiple analytical and procedural flaws in the lower court’s reasoning and reinstated the incentive plan in full, awarding Tesla nominal damages of $1.
The compensation package, originally approved in 2018, was once valued at about $55 billion and has since ballooned alongside Tesla’s stock price. It was voided last year by Chancellor Kathaleen St. Jude McCormick after a shareholder lawsuit alleged conflicts of interest and inadequate disclosures during the approval process.
McCormick had ruled that Tesla’s board was overly influenced by Musk and that shareholders were misinformed. She cited Musk’s close personal and professional relationships with members of the compensation committee and concluded there had been no meaningful negotiation over the terms of the deal.
The Delaware Supreme Court disagreed, saying the Chancery Court’s analysis overstated those concerns and failed to properly weigh subsequent shareholder actions, including a second stockholder approval of Musk’s pay plan.
By Tom Ozimek
