Elon Musk Faces Setback but Remains Poised to Amass More Wealth

Elon Musk Faces Setback but Remains Poised to Amass More Wealth

Elon Musk's Setback: Wealth Still Within Reach | Mr. Business Magazine

Category: News

Source: gq.com

Elon Musk’s, one of the wealthiest individuals in the world, recently faced a legal defeat regarding a massive $101 billion pay package. However, despite the setback, Musk’s position as a financial powerhouse remains unshaken, and there are numerous pathways for him to continue building his fortune.

Court Ruling on Pay Package

The Delaware Chancery Court reaffirmed its decision to void Musk’s controversial 2018 pay package. This package had granted him options to purchase 304 million Tesla shares at a bargain price of $23.34 per share, significantly lower than Tesla’s current trading price of over $350 per share.

Chancellor Kathaleen McCormick ruled that the pay package, which had been approved by 84% of shareholders excluding Musk and his brother, was not fair to other investors. She emphasized that her earlier decision invalidating the package remained valid, despite the shareholder vote.

Elon Musk’s strongly criticized McCormick’s ruling, accusing her of bias, but the decision stands.

Current Wealth and Potential Gains

Even without the $101 billion pay package, Musk’s wealth remains staggering. The 411 million Tesla shares he already owns are valued at $147 billion, placing him among the richest individuals globally. Depending on stock valuations, Musk’s net worth rivals or surpasses Amazon founder Jeff Bezos, making him either the richest or second-richest person on the planet.

Musk’s financial empire extends beyond Tesla. He owns a 42% stake in SpaceX, the most valuable privately held company, estimated to be worth $88 billion. Recent reports suggest SpaceX may raise its valuation to $350 billion, which would increase the value of Musk’s stake to $147 billion. Additionally, Musk owns shares in xAI, Neuralink, and The Boring Company, further diversifying his wealth.

Possible New Compensation

With the 2018 pay package invalidated, Tesla’s attorneys have argued that Musk deserves compensation for his leadership, particularly as he receives no salary or bonuses and has not been paid since 2018.

The court ruling did not rule out compensation entirely, and McCormick noted that a more moderate pay package could be considered fair. Tesla could explore offering Musk a smaller compensation package or develop a new one altogether.

Elon Musk’s has previously expressed interest in a pay package that would increase his stake in Tesla. He currently controls a 13% stake in the company but has stated that he would prefer ownership closer to 25% to maintain influence while still being subject to shareholder accountability.

Tesla’s Potential Growth

Tesla shares have surged 42% in the four weeks since the U.S. presidential election, reflecting optimism about potential policies that could benefit Elon Musk’s businesses. This recent increase has already boosted the value of Musk’s shares by $43.4 billion.

Looking ahead, Musk and his supporters believe Tesla has enormous growth potential. Investment firm Ark Invest has set a five-year price target of $2,600 per share for Tesla, representing a 600% increase from its current value. If this projection materializes, Tesla’s market capitalization will exceed $8 trillion, surpassing the combined current values of Apple and Microsoft.

If Tesla shares reach this target, Musk’s existing 411 million shares would be worth over $1 trillion, potentially making him the world’s first trillionaire.

Broader Implications

Despite his confidence in Tesla’s growth trajectory, Musk has acknowledged that some of his predictions, such as the development of fully autonomous vehicles, have been overly optimistic. However, if Tesla succeeds in achieving its goals of self-driving cars, robotaxis, and AI advancements, Musk’s fortune could grow exponentially.

The court’s ruling may delay Musk’s immediate financial gains, but it is unlikely to impact his overall trajectory significantly. With his existing wealth, substantial stakes in multiple high-value companies, and ambitious visions for the future, Elon Musk’s remains well-positioned to further cement his legacy as one of modern history’s wealthiest and most influential figures.