Elon Musk, the CEO of Tesla, became one of the richest persons in the world, but his 2018 compensation package was ruled down by a Delaware state court judge on Monday. A shareholder filed the case contesting the payout, claiming that it was an excessive distribution.
The Tesla board's approval of the compensation plan, according to Judge Kathaleen McCormick, was "deeply flawed." According to the ruling, the board of Tesla Motors will need to start over and develop a fresh proposal, almost five years after the company's co-founder was given the greatest executive salary package in history.
What does the Delaware court's ruling hold for Musk?
Musk had been the richest person in the world for the previous two years, but the decision might push him down to third place. The judge's ruling also occurred just a few days after Elon Musk told analysts he intended to increase his ownership of the electric carmaker to keep control of the business, prevent his removal, and pursue his interests in artificial intelligence.
The decision puts Mr. Musk's financial future in jeopardy. The options were one of his most significant holdings, estimated to be worth $51.1 billion. Based on the Bloomberg Billionaires Index, he would be the third richest person in the world without them, having been the richest for the majority of the previous two years.
Musk, the CEO of Tesla and a significant shareholder, expressed his dissatisfaction with the ruling on his platform X and cautioned against incorporating businesses in Delaware.
Directors for Tesla contended throughout the week-long trial that the agreement was made to guarantee that one of the most dynamic businessmen in the world would continue to focus on the company.
However, the court determined that both Tesla and Mr. Musk's legal representatives "were unable to prove that the stockholder vote was fully informed" and that he had "extensive ties with the persons tasked with negotiating on Tesla's behalf."
ALSO READ: Layoffs continue as Payment firm PayPal plans to cut off more than 2000 jobs: REPORT