Tesla’s stock fell 1.6% on Tuesday after a Delaware judge denied CEO Elon Musk’s $56 billion pay package for a second time. The court previously struck down Musk’s performance-based pay package in January, citing it as excessive and misleading to shareholders.
The package was designed to retain Musk by giving him stock options that would give him voting control. However, Musk sold some of his shares to fund his Twitter purchase, reducing his stake from 22% to 13%. To achieve the full value of the package, Tesla’s market cap needs to reach between $50 billion and $650 billion by 2028.
Tesla shareholders initially approved the pay package in 2024, but the judge denied Musk’s motion to revise the earlier ruling. The company has stated that it plans to appeal the decision. Despite this setback, Tesla’s stock price has surged, reaching over $1 trillion, which means the value of Musk’s pay package is now around $100 billion.
Musk had previously indicated that he could leave the company if he didn’t secure 25% voting control. The judge’s decision comes as a blow to Musk and Tesla shareholders, who were hoping for a more favorable outcome.
Source: https://finance.yahoo.com/news/tesla-stock-slides-after-elon-musks-multibillion-dollar-pay-package-gets-blocked-180503222.html