Tesla, as a publicly traded company, is a financial pillar of his business empire.
Is Tesla CEO Elon Musk worth the money? A Delaware Court rescinded his pay deal Tuesday, according to the Wall Street Journal. I infer the judge considers Musk overpaid.
But I think Tesla’s shareholders have benefited from the deal. In March 2018, when Tesla’s board approved Musk’s pay package, Tesla was losing money and its stock traded at around $17 a share — giving the company a stock market capitalization of $60 billion. Since then Tesla stock has soared to $187 a share — yielding a value of $610 billion.
On January 30, a Delaware court rescinded Musk’s compensation package. The judge — who valued the package at $55.8 billion — argued Tesla’s board was shirking its fiduciary duty to shareholders when it approved the pay package, noted the Journal.
Viewing Musk’s pay from a return on investment perspective, the judge is missing the point. For Musk’s $55.8 billion, Tesla shareholders enjoyed a 10-fold return on their investment — since the company’s market capitalization has increased by $550 billion in the last nearly six years.Musk’s Pay Package
In March 2018, Tesla’s board granted Musk a pay package consisting of 12 tranches of stock options.
