Elon Musk's net worth balloons despite court rejecting Tesla pay package
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U.S. President-elect Donald Trump and Elon Musk watch the launch of the sixth test flight of the SpaceX Starship rocket in November. Photo: Brandon Bell/Getty Images
A Delaware judge's ruling rejecting Elon Musk's Tesla compensation package— for the second time — is but a small setback for his finances as his net worth soars in the immediate aftermath of Donald Trump's electoral triumph.
Why it matters: Musk was already the world's richest person before the election, and now his pocketbook and his power are getting even bigger.
- His net worth is now estimated at $353 billion, up $91 billion over the last month, according to the Bloomberg Billionaires Index.
The big picture: Conveniently seen as the First Buddy to Trump after opening his personal coffers for campaign purposes, Musk is positioned to directly influence federal spending and regulation.
- And as investors have signaled, that's likely to benefit Musk and his expansive business empire.
Case in point: Tesla — which would benefit from a federal regulatory framework for self-driving cars — has seen its share price jump about $100, or 40%, since the election.
- SpaceX — which needs to maintain a steady flow of federal contracts — is reportedly poised to sell shares in a deal that would value the company at $350 billion, up nearly $100 billion in a month.
- On a personal level, Musk would benefit from getting the Securities and Exchange Commission off his back after years of tussling with the agency.
- And he's co-leading a government-slashing effort alongside Vivek Ramaswamy dubbed the Department of Government Efficiency, giving him influence over what is and is NOT excised from the federal budget.
The Tesla pay ruling is a setback for Musk's finances, however — at least in the near term.
Catch up quick: Delaware Chancery Court Chancellor Kathaleen McCormick ruled Monday that a recent Tesla shareholder vote endorsing Musk's pay package — originally valued at $56 billion and now worth some $100 billion — does not change her original ruling invalidating it.
- She had initially dismissed the compensation deal in January, saying Musk had failed to prove it was fair and properly disclosed to shareholders when it was first announced in 2018.
- Tesla on Monday night vowed to appeal, saying "this ruling, if not overturned, means that judges and plaintiffs' lawyers run Delaware companies rather than their rightful owners – the shareholders."
- Musk Tuesday called McCormick "a radical far left activist cosplaying as a judge."
What's next: The ruling means the pay package ceases to exist for now.
- Tesla will almost surely attempt to replace it if it can't get the package reinstated on appeal to the Delaware Supreme Court.
- But creating a new compensation plan could come with unintended ramifications such as "higher costs," "greater dilution" of shares and "tax consequences," University of Pennsylvania Carey Law School business law professor Jill E. Fisch tells Axios.
Zoom out: Don't expect Musk to take a big financial hit, no matter how this works out.
- The Tesla board has shown it'll do whatever it takes to keep Musk happy.
- SpaceX's whopping valuation jump in recent weeks suggests that investors believe the company is poised for a windfall in federal business.
The bottom line: Trump's victory has been a phenomenal development for Elon Musk's finances.
