Tesla CEO Musk Becomes First Person to Exceed $700 Billion Net Worth

TLDR

• Elon Musk became the first person to reach $700 billion in net worth after Delaware’s Supreme Court approved his Tesla compensation package
• The court restored Musk’s 2018 pay deal valued at $139 billion, overturning a previous ruling that voided it
• Musk met all performance targets in the agreement over six years, leading the court to reinstate the package
• His Tesla ownership will increase from 12.4% to 18.1% when he exercises the stock options
• The ruling ends a legal battle that began with a lawsuit from a shareholder who owned nine Tesla shares

Elon Musk’s net worth reached $749 billion on December 20, 2024, making him the first person in history to exceed $700 billion in wealth. The milestone came after Delaware’s Supreme Court reinstated his 2018 Tesla compensation package.

The court reversed a lower court decision that had canceled the pay deal. The package is currently worth approximately $139 billion based on Tesla’s stock price. This represents the largest executive compensation package in corporate history.

Tesla’s board initially approved the stock-based compensation in 2018. Shareholders voted to ratify the agreement that same year. The deal tied Musk’s pay entirely to performance milestones at the electric vehicle company.

A shareholder named Richard Tornetta challenged the package in court. Tornetta owned only nine Tesla shares when he filed the lawsuit. He claimed the compensation was improperly negotiated and involved conflicts of interest that weren’t disclosed.

Lower Court Voided Original Agreement

Delaware’s Court of Chancery sided with Tornetta in 2024. The court voided the entire compensation package, calling it excessive. The judge ruled the deal wasn’t in the best interest of Tesla shareholders.

After that ruling, Musk moved Tesla’s incorporation from Delaware to Texas. He criticized Delaware’s business environment publicly. Several other companies followed Tesla’s lead and left the state.

The Delaware Supreme Court disagreed with the lower court’s decision. All judges voted unanimously to restore the pay package. They found that completely canceling the compensation was improper.

The court emphasized that Musk had successfully met all performance targets outlined in the 2018 agreement. The ruling stated he should not be left “uncompensated for his time and efforts over a period of six years.” Musk posted “Vindicated” on X after the decision was announced.

Musk’s Growing Fortune and Tesla Stake

Tesla shareholders voted again in November 2024 to approve Musk’s compensation. The company had prepared a backup $29 billion replacement package in case the appeal failed. Tesla can now cancel that alternative offer, saving $26 billion in reported profit hits.

When Musk exercises his stock options, his Tesla ownership will jump from 12.4% to 18.1%. The options allow him to purchase shares at 2018 prices. This will give him greater control over the company’s direction.

Musk’s wealth has grown dramatically in recent years. His net worth was $24.6 billion in 2020 and reached $219 billion by 2022. In 2024, he crossed $400 billion for the first time.

SpaceX’s announcement of a 2026 public offering helped push his net worth above $600 billion in November. The aerospace company’s rising valuation has been a major factor in his wealth growth. Tesla shares have gained 19.2% during 2024.

Analysts currently rate Tesla stock as a Hold with an average price target of $382.87. The legal battle affected Delaware’s reputation as a preferred state for corporate incorporation. Musk stated his companies would not acquire any business incorporated in Delaware.

The restored compensation package confirms Musk’s position as the world’s wealthiest person by a wide margin.

The post Tesla CEO Musk Becomes First Person to Exceed $700 Billion Net Worth appeared first on Blockonomi.