Last month, the Delaware Court of Chancery struck down Elon Musk’s gravity-defying $55.8 billion pay-package at Tesla, approved by shareholders in 2018. At $55.8 billion maximum value and $2.6 billion fair value, the compensation was almost entirely through stock grants. The plan was “250 times larger than the contemporaneous median peer compensation, 33 times larger than the plan’s closest comparison, which was Mr Musk’s previous compensation plan.” In 2022, it was estimated to be around six times larger than the combined pay of the 200 highest-paid executives in 2021.

The judge, Chancellor Kathaleen McCormick, found the process for securing the approval deeply flawed. Her numerous observations in the post-trial opinion resonate with those in our market. These include Mr Musk’s relationship with the independent directors; his 21.9 per cent equity ownership in the company at the time the board approved his compensation plan, and what this implies; Mr Musk being a superstar CEO; and Mr Musk’s trifecta of roles - CEO, chair, and founder.

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