Charles Hoskinson has recently revealed a mind-blowing fact about Elon Musk. According to Hoskinson, Musk had an agreement with Tesla’s board and shareholders that if he increased the company’s value to a trillion dollars, he would receive a 5% commission. Surprisingly, this deal was approved by 80% of the shareholders and the board.
This made Musk a part of an exclusive group of CEOs whose businesses have achieved trillion-dollar valuations, also known as the “trillion dollar club.” However, a Delaware judge later declared the compensation agreement void and awarded $5 billion to the attorneys who contested it through a lawsuit.
Hoskinson’s revelation has sparked discussions about legal justice and corporate governance. Musk’s performance-based compensation plan seemed straightforward, so the sudden invalidation of the agreement left many puzzled.
The judge’s decision brings into question the validity of Delaware corporate agreements, but it aligns with the state’s policies. The lawsuit argued that despite board and shareholder approval, Musk’s compensation was unreasonable and not in Tesla’s best interest. This ruling highlights the potential implications of conducting business in Delaware compared to other states with more stable and advantageous conditions for corporations, such as Wyoming, as suggested by Hoskinson.
Despite the setback, Elon Musk continues to be one of the wealthiest individuals globally, if not the richest. It’s important to note, however, that the valuation of a company does not necessarily reflect its true liquid value.