Elon Musk’s $55.8 billion pay package from Tesla has been voided by a Delaware court ruling, and while Tesla can still appeal the decision, the impact of this ruling goes beyond just damaging Musk’s personal gain. The ruling risks hindering Musk’s ambitions for both Tesla and SpaceX. If the appeal fails, Musk will lose options on approximately 303 million Tesla shares, leaving him with only a 13% stake in the EV maker. This could cause his focus to shift away from Tesla as he pursues AI and robotics ventures elsewhere. Additionally, the court’s decision could harm Musk’s ability to fund X.
The ruling also raises questions of whether Delaware is still the best location for corporate domiciles due to legal pushback toward Musk’s power. Musk’s response has been to discourage incorporating companies in Delaware and to recommend Nevada or Texas instead. This could suggest a shift towards Texas, where Tesla has its physical headquarters, for a friendlier corporate environment. With Texas establishing new business courts, it’s likely that Musk will embrace this new regime if it caters to his corporate interests.
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