Elon Musk, the visionary entrepreneur behind Tesla and SpaceX, has made history by becoming the first person to achieve a net worth of over $700 billion. This monumental milestone was reached following a ruling by Delaware’s Supreme Court reinstating Musk’s groundbreaking 2018 Tesla compensation package.
The Court’s Decision: Reinstating the $139 Billion Compensation Package
On December 20, 2024, Delaware’s Supreme Court overturned a lower court’s decision that had previously nullified Musk’s record-breaking Tesla compensation deal. Originally approved in 2018, the package, now valued at approximately $139 billion based on Tesla’s stock price, represents the largest executive compensation package in corporate history.
Under this agreement, Musk’s pay was entirely tied to performance milestones, ensuring he met specific goals before compensation was granted. Over the span of six years, Musk successfully fulfilled all outlined targets, which factored significantly into the court’s unanimous decision to reinstate the deal.
Legal Battles and the Move from Delaware to Texas
The legal road to this decision was not without its hurdles. The original lawsuit, filed by Tesla shareholder Richard Tornetta, argued that the agreement was improperly negotiated. In 2024, Delaware’s Court of Chancery sided with Tornetta, voiding the package. Musk responded by moving Tesla’s incorporation from Delaware to Texas, citing dissatisfaction with Delaware’s business environment. The relocation sparked a trend among other companies, moving away from Delaware’s traditionally corporation-friendly policies.
The Delaware Supreme Court’s reinstatement of the package not only ended the long legal feud but also reaffirmed Musk’s pivotal role at Tesla. The ruling noted that canceling the package outright was improper, emphasizing Musk was justified in being compensated for his extraordinary achievements over the six-year period.
Elon Musk’s Soaring Wealth and Tesla’s Growth
With Musk’s granted stock options, his Tesla ownership will rise from 12.4% to an impressive 18.1%. These options allow for the purchase of shares at 2018 prices, further solidifying Musk’s position in Tesla’s leadership and strategic direction.
Musk’s net worth highlights his unprecedented rise in wealth. In 2020, his net worth stood at $24.6 billion; by 2022, it escalated to $219 billion. In 2024, Musk surpassed $400 billion, and he crossed the $700 billion threshold in late 2024. Much of this growth is attributed not only to Tesla’s performance but also to SpaceX, where its upcoming 2026 public offering has significantly boosted its valuation.
What This Means for the Future of Tesla
Industry experts expect this decision to further stabilize Tesla’s shareholder confidence. Analysts are closely monitoring the stock, which closed 2024 with a 19.2% increase in value. The reinstated compensation package eliminates the need for an alternative $29 billion backup deal Tesla planned in case of an unfavorable court decision, saving the company $26 billion in reported profit hits.
Enhance Your Productivity Like a Billionaire
Interested in following billionaire habits? Incorporate innovative tools into your daily routine. Consider Temi’s AI-Powered Meeting Transcription tool to optimize your workflow and achieve peak efficiency. Trusted by professionals, Temi ensures no detail is overlooked, saving valuable time in your busy lifestyle.
