A Delaware judge has made a surprising ruling that threatens Elon Musk‘s status as the richest person in the world: Elon Musk won’t get a $55 billion pay package after all from Tesla. Chancery Court Judge Kathaleen McCormick ruled that Tesla’s board must come up with a new proposal, stating that Musk “misled shareholders” when the package was approved in 2018.

Without the options in that massive package, Musk may fall from his perch as the world’s wealthiest individual. According to Bloomberg, he could drop to only the third-richest without it. So what happened? Why did a judge step in to block this huge payday for Musk?

It all goes back to 2018 when Tesla shareholders approved a monstrous compensation package for Musk that could be worth over $50 billion if certain ambitious milestones were hit. Essentially, it gave Musk huge incentives to boost Tesla’s value from $50 billion to over $650 billion. The plan was hugely controversial given its unprecedented size.

But now Judge McCormick has ruled that shareholders weren’t given key details about how the plan was created and how beholden the board members were to Musk. Tesla didn’t properly disclose that Musk himself devised the pay scheme or that directors lacked true independence from him.

In her decision, McCormick wrote: “Defendants were unable to prove that the stockholder vote was fully informed…These facts do not justify the largest compensation plan in the history of public markets.”

She noted the almost fawning relationships between Musk and Tesla board members, finding he “wielded maximum influence.” The list of ties is striking: his own brother Kimbal sits on the board. So does his old friend and investor Antonio Gracias. Another director, James Murdoch, has vacationed around the world with Musk. Some owed most of their wealth to Musk-founded companies. One director made more from her Tesla board salary than anywhere else.

Essentially, as McCormick wrote: “They were there to cooperate with Musk, not negotiate against him.”

So this ruling threatens to deflate, but probably not pop, Musk’s epic compensation bubble. Tesla’s board must return to the drawing board and devise a new, more modest and ethical plan. And Musk has make do with his existing vast billionaire fortune rather than expanding it wildly with questionable mega-grants.

Musk himself had few words about the shocking ruling, beyond a bitter post on X/Twitter: “Never incorporate your company in the state of Delaware.” After years of outsized pay unchecked by timid, compliant directors, Elon Musk finally faces real limits imposed by a court. He won’t get that $55 billion after all.