Elon Musk's Divorce Strategy, Inside CEO's No Equity Policy With Ex-Wives, Opts For Cash Settlements

Elon Musk has become a trillionaire. However, while he reaps the rewards of SpaceX's latest IPO, his ex-partners barely seem to have gained from it. The main reason for this is Elon's strict rule against giving up equity to his partners. So, as the SpaceX CEO celebrates his newfound success, let's take a quick look at why he made this decision.

Elon Musk rejected his first wife, Justine Musk's request for equity

Elon Musk shared a long relationship with his first wife, Justine Musk. However, when it came to equity, even the mother of his six children was written off from the list. Elon filed for divorce from Justine in 2008, shortly before becoming the CEO of Tesla and entering the Forbes billionaires list with an estimated net worth of USD 2 billion.

Nonetheless, when Justine requested their house, child support, USD 6 million, a glacier-blue Tesla Roadster, 10 per cent of Tesla shares, and 5 per cent of SpaceX shares, Elon refused to offer her equity. According to reports, Elon had offered her 80 million before taxes, which she rejected in favour of equity stakes in Tesla and SpaceX, both still early-stage assets. She ultimately received neither an equity stake nor the value of Elon's original cash offer. 

Also Read: Who Will Get Elon Musk's USD 1.1 Trillion Wealth? He Says Passing It To His Kids Will Be A 'Mistake'

Why did this happen?

A key reason for this was the post-nuptial agreement signed in March 2000. Justine later wrote in Marie Claire that she had believed her marriage would last, and she had trusted her husband with the legalities. Justine had signed away her rights to community property, except their house, which would be transferred to her after the birth of a child.

Justine tried to challenge the post-nuptial agreement in court, arguing that Elon had kept the merger of X.com and Confinity, which later became PayPal and was sold to eBay for USD 1.5 billion in stock, with Elon reportedly earning at least USD 100 million. However, the ruling came in Elon's favour, and Justine ended up with USD 20 million after taxes, including half the value of their Bel Air home and monthly payments for personal and household expenses. 

Elon Musk's pattern of keeping the arrangement to cash only

However, Elon has not kept this pattern with Justine alone. According to reports, even with his arrangement with Ashley St. Clair, the mother of one of his children, he followed a similar template for all the mothers of his children. He offered Clair USD 15 million and USD 100,000 a month in exchange for her silence about the child, whom they named Romulus. He just as quickly pulled back the offer after she went public about Elon being the father of her son.

Something similar happened with his relationship with British actress, Talulah Riley. It didn't take long for them to fall for each other and were even "engaged within two weeks of knowing each other," Riley said in 2018 during a 60 Minutes story. Elon was married to Talulah twice: from 2010 to 2012, then again from 2013 to 2016. However, the pair did not have any children, and she reportedly still received a similar sum to Justine's from the two divorces combined. In 2022, she called Elon "the perfect ex-husband" and "a great friend."

Also Read: How Elon Musk And Justine's Postnup Kept Her From Billionaire Status Despite Marriage To SpaceX CEO

How are Elon Musk's divorces different from other superwealthy divorces?

According to reports, if Justine had gotten the stakes, she'd be worth USD 17.3 billion today. A sum close enough to make her the planet's 113th-richest person. It's a stark contrast to two other superwealthy divorces of recent times, including Jeff Bezos' divorce from his ex-wife, MacKenzie Scott, which gave her one-quarter of his then 16 per cent stake in e-commerce giant Amazon in their 2019 divorce. It was 36 billion at the time.

Another big divorce was Bill Gates' 2021 divorce settlement with Melinda French Gates, which wasn't made public, but Forbes estimates she received USD 25 billion from his then-estimated USD 124 billion fortune. This is living proof that while Elon is willing to spend money of his ex-partners, parting with ownership is not something he has considered.

image credit: DiscussingFilm/X, justinemusk/IG, FoxNews/X, stclairashley/X

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