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Elon Musk’s $56 Billion Pay Package Faces Legal Challenge in Court

The $56 billion pay package, which was approved by Tesla’s board in 2018, allows Musk to buy 1% of Tesla’s stock at a deep discount each time the company meets certain performance and financial targets

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Elon Musk

Elon Musk is a polarizing figure in the business world. He’s known for his bold statements, disruptive ideas, and outlandish behavior. But his latest controversy involves a massive pay package that he designed for himself at Tesla, which is currently being challenged in court.

The $56 billion pay package, which was approved by Tesla’s board in 2018, allows Musk to buy 1% of Tesla’s stock at a deep discount each time the company meets certain performance and financial targets.

This has led to accusations that Musk coerced compliant directors into providing a package of his design, which is many times larger than the combined pay of the next 200 highest-paid CEOs. It contributes to Musk’s fortune, the world’s second largest.

The legal challenge, brought by small Tesla investor Richard Tornetta, argues that the pay package improperly subsidized Musk’s dream of one day traveling to Mars. Tornetta believes that the Tesla board had a duty to offer a smaller pay package or look for another CEO and they should have required Musk to work full-time at Tesla instead of allowing him to focus on other projects, like running Twitter.

During the five-day trial in November, Investors King understands that Musk testified about the origins of the pay package and whether its performance goals were difficult to achieve and accurately described to investors.

Musk admitted that his pay package provided funds he would use to finance interplanetary travel. “It’s a way to get humanity to Mars,” he testified. “So Tesla can assist in potentially achieving that.”

Tesla has hit 11 of the 12 targets as its value ballooned to briefly top $1 trillion in 2021 from $50 billion when the package was negotiated. Musk’s lawyers argue that the pay plan benefited shareholders by increasing the value of their stock 10 times.

The outcome of this legal challenge will have significant implications for Tesla and for Musk. Chancellor Kathaleen McCormick of Delaware’s Court of Chancery must determine if Musk, who owned 22% of Tesla stock in 2018, controlled the company through board ties and his personality. If the court rules against Musk, some or all of the pay package could be rescinded, and Musk’s grip on Tesla could be weakened.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Elon Musk Reclaims World’s Richest Title with $6 Billion AI Startup Boost

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Elon Musk X

Elon Musk has once again ascended to the top of the global wealth rankings, surpassing Bernard Arnault, after his new artificial intelligence startup, xAI, secured $6 billion in funding.

This latest financial windfall has catapulted Musk’s net worth to an astonishing $209.2 billion, outstripping Arnault’s $199.3 billion and placing Jeff Bezos in second place with an estimated $199.9 billion as of May 30, 2024.

The announcement, made during the Memorial Day weekend, highlighted the significant investment in xAI, which now boasts a pre-money valuation of $18 billion.

Musk’s 60% stake in the startup is estimated to be worth $14.4 billion, further solidifying his financial dominance.

This valuation surge is particularly noteworthy considering the involvement of investors from Musk’s $44 billion acquisition of Twitter, now rebranded.

Musk’s wealth is predominantly derived from his substantial holdings in Tesla and SpaceX. His nearly 12% stake in Tesla and 42% stake in SpaceX are each valued at approximately $75 billion.

Despite Tesla’s fluctuating stock prices and the rising valuation of SpaceX, Musk’s financial prowess remains robust.

Also, Forbes estimates that the value of Musk’s 74% stake in his social media company has decreased to around $7 billion, nearly 70% less than its purchase price in 2022.

In a significant legal development, a Delaware judge invalidated nearly $50 billion in performance-based Tesla stock options granted to Musk in 2018, citing unfair award processes.

Tesla shareholders are set to vote on reapproving these options on June 13, which could further impact Musk’s financial status.

Meanwhile, SpaceX is reportedly aiming for a valuation of $200 billion, up from $180 billion last December, indicating a continued upward trajectory for Musk’s ventures.

The Forbes Real Time Billionaire Index, as of May 30, reflects the shifting fortunes of the world’s wealthiest individuals.

Musk now leads with $209.2 billion, followed by Bezos at $199.9 billion, and Arnault at $199.3 billion.

Other notable figures in the top ten include Mark Zuckerberg, Larry Ellison, Larry Page, Sergey Brin, Warren Buffett, Bill Gates, and Steve Ballmer.

Musk’s remarkable financial rebound underscores the volatile nature of the global wealth rankings and the significant impact of strategic investments in emerging technologies.

As xAI continues to develop, it will be intriguing to observe how Musk leverages this new venture to maintain his position as the world’s richest person.

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Vietnam Court Sentences Real Estate Tycoon to Death Over $12.46 Billion Fraud Case

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Truong My Lan

A court in Vietnam has sentenced real estate tycoon Truong My Lan to death for her involvement in a $12.46 billion financial fraud case.

The verdict delivered on Thursday comes after a trial that began on March 5 and ended earlier than anticipated, drawing attention both domestically and internationally.

Truong My Lan, the chairwoman of real estate developer Van Thinh Phat Holdings Group, was found guilty of embezzlement, bribery, and violations of banking regulations in the bustling business hub of Ho Chi Minh City.

Despite pleading not guilty to the charges of embezzlement and bribery, the court handed down a death sentence for the embezzlement charge and 20 years each for the other two offenses.

The trial and subsequent verdict are part of a broader crackdown on corruption spearheaded by Vietnam’s ruling Communist Party, led by Nguyen Phu Trong, who has long vowed to eradicate corruption from the country’s political and economic landscape.

The case revolves around allegations of massive embezzlement and financial mismanagement within Saigon Joint Stock Commercial Bank (SCB), which Truong My Lan effectively controlled through a network of proxies.

Prosecutors accused her of siphoning off over 304 trillion dong from the bank through illicit loans to shell companies and other unlawful practices.

Truong My Lan’s rise from a cosmetics trader to a prominent figure in Vietnam’s financial world adds a layer of intrigue to the case. Starting her career in the central market of Ho Chi Minh City, she founded Van Thinh Phat in 1992 and quickly ascended to prominence in the real estate sector.

However, her fall from grace has been swift and dramatic, culminating in the unprecedented death sentence.

The trial also implicated several others, including Lan’s husband, Eric Chu, and her niece, who received lengthy prison terms for their roles in the fraud scheme.

The court’s decision reflects the severity with which Vietnam is addressing corruption within its borders, with the government keen to demonstrate its commitment to accountability and transparency.

Despite the verdict, some remain skeptical about the effectiveness of Vietnam’s anti-corruption efforts, pointing to widespread bribery and graft across various sectors.

However, the sentencing of Truong My Lan sends a strong message that no one, regardless of their status or influence, is above the law in Vietnam’s pursuit of justice and integrity.

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Nigerian Billionaire Tony Elumelu Contemplates Acquiring NPFL Club

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Tony Elumelu

Tony Elumelu is reportedly considering the acquisition of a club in the Nigeria Professional Football League (NPFL).

The 61-year-old Nigerian mogul, renowned for his astute business acumen and commitment to socio-economic development across Africa, has hinted at his interest in bolstering the domestic football scene during discussions with the Minister of Sports Development, Senator John Owan Enoh.

Elumelu, who chairs notable entities like Heirs Holdings, Transcorp, and United Bank for Africa (UBA), expressed openness to the idea of private ownership of clubs in Nigeria, particularly as part of Corporate Social Responsibility (CSR) initiatives proposed by stakeholders.

The notion of corporate entities investing in football clubs as a means of fostering development and promoting sports excellence has gained traction in recent years. A suggestion put forth by a user identified as LawyerDay on social media sparked dialogue on the topic, igniting Elumelu’s interest in exploring this avenue further.

Responding to LawyerDay’s proposal advocating for prominent corporations in Nigeria to acquire league clubs for CSR purposes, Elumelu affirmed the viability of such a venture.

He acknowledged having been approached by Minister Owan Enoh to evaluate the feasibility of such acquisitions, signaling a potential move towards club ownership.

“This is a nice idea,” remarked Elumelu, accompanied by a thumbs-up emoji, in response to the suggestion put forth. “The Sports Minister, Senator John Enoh, is already thinking along this line and has approached me, and we are already evaluating viability,” he added.

Should Elumelu proceed with acquiring a club in the NPFL, it could mark a significant turning point for the league, injecting fresh capital, expertise, and resources into Nigerian football.

His track record of success in various sectors, coupled with his commitment to driving positive change, positions him as a formidable force capable of elevating the profile of domestic football.

As one of the wealthiest individuals in Nigeria and Africa, with diverse investments spanning financial services, real estate, hospitality, healthcare, power, oil, and gas, Elumelu’s potential foray into club ownership holds promise not only for the NPFL but also for the broader sporting landscape in Nigeria.

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