Won’t somebody please think of the world’s richest man? Elon Musk was steaming after Delaware judge Kathaleen McCormick ruled against reinstating the controversial pay package – now worth more than $100 billion (€94.5 billion) following Tesla’s recent rally – awarded to Musk in 2018.
To Musk, the decision is “absolute corruption”.
A quick recap: in 2018, Tesla set performance goals for Musk. He hit the targets, and Tesla’s enormous share price gains unlocked a gargantuan share option package.
In January, Judge McCormick said Tesla should not have agreed to it, criticising the board’s lack of independence from Musk. Tesla held a second ratification vote in June, but the new shareholder vote has not persuaded McCormick.
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Musk is already worth $330 billion, and his aforementioned compensation package appears obscene to many. Nevertheless, one can see why some see this as judicial overreach. Musk’s pay package has twice been approved by more than 70 per cent of Tesla shareholders. If shareholders want to shower their so-called techno-king with lavish rewards, that is surely their choice – even if it’s a questionable one.
Still, Tesla could have avoided this mess if they hadn’t shown such reckless disregard for corporate governance and packed the board with Musk cronies. Thus, the saga continues: a cautionary tale of what happens when a company worships its leader at the expense of accountability.
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