Yes, Elon Musk Deserves $50 Billion

Elon Musk is the third-richest person in the world. Rightly so? Yes, say Tesla shareholders.

The vote ahead of Tesla’s annual shareholder meeting was about much more than just a remuneration package for a CEO. The question was whether one person should really be allowed to earn $50 billion and who should decide that. Tesla shareholders said yes to the first question. And their answer to the second question is — we, the shareholders.

As reported, in 2018, the shareholders approved a remuneration package which provided stock options to Elon Musk for reaching very ambitious targets. Musk met all the requirements, which could now earn him options currently worth around $50 billion.

Could, because a court nullified the payment package. The shareholders were not sufficiently informed about the details, the judge said. But did anyone actually feel damaged by the payment package? The plaintiff, a shareholder holding nine shares, is likely to have been encouraged by a group of lawyers who, in turn, want to claim a tenth of the remuneration they believe Musk should not receive as a fee. It is questionable whether the court will agree.

Musk, the third-richest person in the world with a fortune of $203 billion, is naturally a highly controversial figure. His detractors think he is a phony because he has yet to deliver a fully self-driving car. They criticize his polarizing X posts and believe that they will damage Tesla. And then there are those people who think there shouldn’t be any billionaires at all.

But what is ultimately relevant is what Tesla’s owners, i.e., the shareholders, think — and they have voted once more to endorse the payment agreement. This time, they had sufficient information. They do not believe that it would be better if the remuneration funds remained in the company. They would prefer Musk to stay with the company.

Shareholders Would Rather Have Musk

Most shareholders bought Tesla shares because Musk is at the helm. The man who endured setbacks with his spaceflight company SpaceX before he finally managed to send rockets into orbit. A man who is now on the verge of developing fully reusable rockets. A man who transformed Tesla from a niche player into a major company and turned the car industry on its head. Shareholders know that Musk has big plans which he pursues with an unmatched tenacity. They also know that he can fail. They have nevertheless decided to buy Tesla shares.

Even so, the judge will have the final say. However, it is becoming harder to argue that the remuneration package is not in the interests of shareholders. They answered the question as to whether one of the richest people in the world is overpaid with a resounding no.