Musk’s previous payout packages were taken as controversies, but now they have developed into a conquest of the tech CEO defying any established pattern of doubling down fortune by leaps and bounds. It seems Mr. Musk’s fortune sees no bounds when it comes to expanding its size.
Musk’s payout packages from Tesla reads like a masterclass into wealth’s executive extraction. Recently he was granted a $32.5 billion interim grant of 96 million shares, while his another payout package of $29 billion faced court challenges. This outlays a pattern that Tesla couldn’t care less about anything in comparison to keeping its CEO happy.
The latest package has surpassed every previous benchmark. A $975 billion compensation package that could theoretically reach $8.5 trillion if Tesla hits impossible targets like $2 trillion market cap and 20 million annual vehicle deliveries.
This doesn’t feel like a performance incentive anymore. It’s all an effort to cement Musk’s control over Tesla, turning him into a monarch cloaked in the corporate lingua of shareholders’ rewards. The fact that all of this is being approved, shows how the entire identity of a corporation is tied to one man’s authority.
When Elon Musk moved the Tesla headquarters to Texas, it wasn’t just about business-friendly policies. Now it seems that it was to avail legal sanctuary for the steps that could have met with scrutiny elsewhere. Texas’ so-called management friendly laws have not only legally approved Musk’s $975 billion compensation package, but they have created a precedent of safe harbor where boards can justify literally any executive payout scheme.
The 423 million additional shares, that are part of the payout package, would solidify Musk’s ownership of 25%, which would in effect make him an active owner from just a CEO. With this scheme at work, now it is evident that when Musk’s previous package was invalidated by the courts, he decided to move to Texas for softer laws and a soft corner in the hearts of the ones making those laws.
The boardroom filled with Tesla’s shareholders are also facing an impossible choice to make. In scenario one they can disapprove this outrageous payout and risk Musk leaving the company for his other venture that would threaten the company’s stocks and reputation to the greatest extent. In scenario two, they would approve the package and enable one of the biggest wealth transfers in corporate history.
Why is this such a hard call to make? Because they’re aware of the credibility that Tesla claims is nothing but Musk’s reputation. On the other hand, Musk’s self serving philosophy is also not lost on them as when Tesla’s share dropped 25% earlier this year, yet Musk was able to pull off his year-over-year growth with a 69% growth rate.
This disconnect is the real story here. The company may lose its value but the individual behind it would still manage to stand victories. It’s quite telling of the lack of meritocracy in the corporate world.
Tesla’ payout packages are not about Musk alone, they have become a stress test for modern American capitalism. With such manipulation of legalese and corporate practice, Tesla is writing a playbook for others where wealth extraction on a huge scale would eclipse corporate precedent.
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