Elon Musk isn’t going to get that $55 billion pay package after all, a Delaware Court of Chancery judge has ruled. The ruling means Tesla’s board will need to come up with a new proposal.

The ruling threatens Musk’s fortune if it makes it through an appeal, Bloomberg reports. Without the options in that package, Musk may only be the third-richest man in the world.

Tesla shareholders approved the package in 2018, which gave Musk incentive to hit specific milestones, including a market valuation of $650 billion, which was more than 10 times Tesla’s value at the time. The trial hinged on a specific question: did Musk mislead the shareholders when he gave them the plan?

Greg Varallo, attorney for the investor who sued, Richard Tornetta, said the investors weren’t told that Musk himself came up with the plan or that the board’s members were beholden to Musk. Last February, Judge Kathaleen McCormick called this argument a “kill shot.”

“Defendants were unable to prove that the stockholder vote was fully informed because the proxy statement inaccurately described key directors as independent and misleadingly omitted details about the process,” McCormick wrote in her decision. “The defendants proved that Musk was uniquely motivated by ambitious goals and that Tesla desperately needed Musk to succeed in its next stage of development, but these facts do not justify the largest compensation plan in the history of public markets.”

One of the big questions in the case was how much of Tesla Musk controlled — and not just through his shares. “Musk wielded the maximum influence that a manager can wield over a company,” McCormick wrote.

The board of directors consisted of a lot of people who had close relationships with Musk:

• Elon Musk.
• Antonio Gracias, a member of the compensation committee and friend of Musk’s who has amassed a great deal of wealth from investing in Musk’s companies as far back as PayPal.
• James Murdoch, another Musk buddy who vacationed with Musk across the globe.
• Musk’s brother, Kimbal.
• Ira Ehrenpreis, one of the members of the compensation committee, acknowledged to the court that his relationship with Elon and Kimbal Musk had “significant influence on his professional career.”
• Brad Buss, another member of the compensation committee who “owed 44 percent of his net worth to Musk entities.”
• Robyn Denholm, a member of the compensation committee whose compensation as a Tesla board chair was more money than she made from other sources.
• Linda Johnson Rice, who appears to have been truly independent.
• Steve Jurvetson, who had a prolonged period of absence during this incident and wasn’t considered a major player by the judge.

“Ultimately, the key witnesses said it all — they were there to cooperate with Musk, not negotiate against him,” McCormick wrote.

Musk has demanded more control over Tesla lately, posting on X earlier this month that he wanted at least 25 percent ownership of the company in order to pursue artificial intelligence work. That would roughly be double his current ownership stake of around 13 percent.

Musk said in follow-up posts that he was waiting for a ruling in the shareholder lawsuit before taking his proposal for a larger ownership stake to the board. “The reason for no new ‘compensation plan’ is that we are still waiting for a decision in my Delaware compensation case,” he wrote on January 15th. “The trial for that was held in 2022, but a verdict has yet to be made.”

He added, “I put ‘compensation plan’ in quotes, because, from my standpoint, this is primarily about ensuring the right amount of voting influence at Tesla.”

Minutes after today’s ruling, Musk posted: “Never incorporate your company in the state of Delaware.”