Charles Hoskinson, the founder of Cardano, has revealed surprising information about entrepreneur Elon Musk. He hinted that the Tesla CEO’s net worth could have been significantly higher if not for certain business laws in Delaware, United States of America.
The Tesla Agreement and Musk’s Achievements
Notably, Elon Musk had a solid agreement with Tesla’s shareholders and board that if he succeeded in growing Tesla’s value to a trillion dollars, he would receive a 5% commission. However, if Musk falls short, the agreement would not stand.
Just to be clear, Musk had a deal with the shareholders and Tesla board that if he grew the value of Tesla to a trillion dollars, he would get a 5 percent commission on it otherwise nothing. The board and 80 percent of the shareholders approved the deal.
Musk then did this being…
— Charles Hoskinson (@IOHK_Charles) June 8, 2024
The deal was approved by the Tesla board and 80% of the shareholders. Although the Cardano founder was silent on the duration given to Musk, if any, the unconventional entrepreneur set to work and achieved the feat.
Musk’s exploit made him one of the few CEOs in history to clock the trillion-dollar mark. In a surprising turn of events, Richard Tornetta, a shareholder, filed a lawsuit to void Musk’s $56 billion pay package.
A Delaware judge, in a retroactive ruling, nullified Musk’s compensation and awarded $5 billion to the lawyers who filed the lawsuit instead. As per the judgment, despite gaining board and shareholders’ approval, Musk’s compensation was unreasonable and not in Tesla’s best interest.
Meanwhile, hundreds of Tesla shareholders have written to the court objecting to the legal fee request.
Cardano Founder Blasts Delaware’s Legal System
The Cardano founder in a post on X expressed his displeasure over the whole episode that rescinded the earlier agreement between the Tesla board, shareholders, and Musk. He blames the legal situation in the state of Delaware.
“There is no rule of law in Delaware anymore,” Hoskinson stated. “Do not incorporate your businesses there. Come to Wyoming.”
Wyoming, known as the Cowboy and the Equality State, portrays itself as welcoming to business and has laws that are favorable to corporate operations. The Cardano founder implied that had the Tesla agreement been reached in “the Equality State,” Musk would be way richer.
Nonetheless, Elon Musk remains one of the richest people in the world.
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