Elon Musk and ‘unfathomable’ $56 billion pay dispute: ‘Six years of no pay for work
Elon Musk, the owner of the American company Tesla, is being considered for the 56 billion-dollar salary package in the country’s corporate history.
The electric vehicle maker has asked shareholders to vote to approve a pay package for Elon Musk, the company’s chief executive and owner. It should be noted that Elon Musk had previously set the record for receiving the highest salary package in US corporate history in 2018.
This matter was simple because the court had not intervened. In January, a court rejected Elon Musk’s fixed salary, and the judge described it as an ‘unfathomable sum.’
The issue comes as Elon Musk has decided to lay off about 10 percent of the company’s workforce globally. In a statement issued to staff, he said he didn’t want to do it but ‘had to do it. ‘
But now that his salary is in the news, it is essential to note that his salary package does not include regular salary or bonuses. This is because, in 2018, the company introduced a system called ‘reward’ based on the company’s value increasing to $650 billion in 10 years.
The amount would increase. Currently, Tesla is worth around 500 billion dollars. Delaware court judge Kathleen McCormick said, ‘ The salary deal is unfair to company shareholders.’He noted that Tesla directors, who finalized the agreement, were ‘motivated by Elon Musk’s reputation and did not provide complete information to the company’s shareholders.
After the court decision, CEO Elon Musk threatened to move Tesla’s headquarters from Delaware to Texas. On Monday, Tesla sent a new filing to shareholders asking them to approve the 2018 package.
Board chairman Ruben Denholm wrote in a letter accompanying the filing that Elon Musk has not been paid for the company’s work for six years, which is unfair to us and many shareholders. He also said that the board does not agree with the court’s decision.
According to the filing, Elon Musk was not paid a penny for his work in 2023 because He does not regularly receive a salary from his own company but earns through its stock.
For his part, Tesla President Robin Denholm criticized the Delaware Chancery Court’s decision in January and wrote in the filing that it amounted to a second-guessing of the shareholders who agreed to compensate Musk.
Chief Justice Kathleen St. J. McCormick described the company’s directors as “recumbent servants of an arrogant master” and said they did not protect investors’ interests.
Because the Delaware court disagreed, Elon was not compensated for any of his work for Tesla over the past six years, which helped create significant growth and shareholder value,” Denholm wrote.
The shareholder who filed a lawsuit against Tesla regarding CEO compensation criticized this lawsuit, describing it as excessive and vague. Musk, who runs six companies, said earlier this year that he would prefer to work on AI and robotics products elsewhere unless he owned a 25% stake in Tesla. He now owns about 13% of the company.
Tesla shares rose 1.1% as of 7 a.m. New York time, before the start of regular trading. The stock is down 37% this year through Tuesday’s close.
