What are the practical effects of the recent court ruling nullifying Musk's Tesla pay package?
What are the practical effects of the recent court ruling nullifying Musk's Tesla pay package?
I read this article and still walked away feeling like I didn't understand the situation that well.
Is it $56 billion that he's already been paid, and he needs to return it? $56 billion he's partially been paid, and he can keep what he has, but won't get the rest? Something more complicated?
Tesla CEO Elon Musk's $55.8 billion pay package was unfair to the electric carmaker's shareholders and must be rescinded
Yes, elon will have to pay it back. You would have to return the money if your employer mistakenly overpaid you too.
If elon is unable or refuses, there are remedies they can pursue, just like all debts.
From the NYTimes::
ordered Tesla to cancel stock options awarded to Mr. Musk, the electric car company’s chief executive, worth about $50 billion.
So yep. Got it. Needs to pay it back
Your article says:
As part of a compensation package Tesla finalized in 2018, Mr. Musk received options to buy 304 million shares that are now worth more than $50 billion. While he has met the goals needed to receive those options, Mr. Musk does not appear to have converted them into shares of Tesla. If he had, he would be barred from selling them for five years.
What are options? Does this mean he didn't receive this compensation yet, and now he simply won't receive it, assuming the company doesn't appeal or move states like the article mentions? It says he had the option to buy 304 million shares - I assume he can buy them at a deep, deep discount compared to their current price?
What are options?
It's a form of contract that allows (but does not obligate) a person to buy X amount of shares for Y price in the future, regardless of the going rate at the time.
Does this mean he didn’t receive this compensation yet, and now he simply won’t receive it, assuming the company doesn’t appeal or move states like the article mentions?
It means he hasn't executed on those options yet - he hasn't yet bought those stocks at the price agreed.