Judge Leaves Elon's $56 Billion Tesla Pay Package in Doubt

Judge Leaves Elon’s $56 Billion Tesla Pay Package in Doubt

Elon Musk signs on to the World Government Summit in 2023 as a crowd of onlookers looks on.

Elon Musk has been mired in several court cases over his Tesla driving suit, but the electric vehicle maker’s board of directors still appears to back the billionaire.
Photo: Kamran Jebreili (PA)

Billionaire Elon Musk may be tightening his pearls a bit more as a Delaware judge left serious doubts about whether his multi-billion Tesla compensation package was made without Musk’s intervention.

In what was supposed to be the day of closing arguments in a multi-year lawsuit in the Delaware Court of Chancery, Chancellor Kathaleen McCormick called for even more additional arguments at a later date on the $56 billion compensation package. that Musk received from Tesla in 2018, prompting him to stay the course as CEO. The final decision could still be months away, according to luck the lawyerwhich reports on the decisions of the Delaware Chancery Courts.

Relatively minor Tesla shareholder Richard Tornetta, himself a drummer for heavy metal band Dawn of Correction, filed a lawsuit in 2019, complaining that Tesla’s board was not so independent of Musk when he created Musk’s massive multi-billion salary package. He argued that the pay was beyond ‘reasonable judgment’ and that the board knew he wasn’t going to be on 24/7 because he runs several other large companies like SpaceX, Neuralink or The Boring Company. Lawyers for Tesla’s board of directors have argued that the salary package was designed from the start to entice the billionaire to step up his efforts at the electric vehicle maker.

Musk has a $56 billion payment deal with Tesla, what was granted to him in 2018. The deal is based on achieving financial growth markers, which grants the CEO millions of dollars in Tesla stock options, namely 1% of outstanding shares when the company reaches one of the 12 allocation periods. The company has achieved 11 of these 12 grant milestones. The plus of Tesla latest quarterly report showed that the company has continued to see revenue and car sales increase, although it falls far short of Musk’s goal of selling 20 million electric vehicles a year by 2030.

During his closing remarks, Tornetta attorney Greg Varallo argued that the pay package should be rescinded because Musk and Tesla’s board misled shareholders about how those grants were created. and how close the directors really were to the CEO of the company. He said in court that a director couldn’t have been truly independent if he had invested millions in Musk’s companies or vacationed all over the world with him.

Musk’s attorneys reiterated their view that the payment package guaranteed Musk’s full focus on transforming Tesla. They strongly denied that the individual directors as a whole had been influenced by Musk to give him the lucrative salary, even as McCormick mentioned that Musk helped move the negotiations forward, at least to some degree.

In a trial held in November last year, Musk argued that while he’s spent many hours on the job at his other businesses, most recently through his $44 billion acquisition of Twitter, he would be done spending so much time on the Blue Bird app once the platform – “repaired” form, or more precisely, once the “fundamental organizational restructuringwas completed. He has since mentioned that he plans to move away from Twitter by the end of 2023. He also told the court that he spent just over 50% at Tesla after receiving that compensation, but has since split his time among his other big companies.

His stint on Twitter was also highlighted during the plaintiff’s closing arguments on Tuesday. Varallo again would have talked about how Musk drove the engineers away from Tesla just so they could beef up some of Twitter’s systems in the early weeks when Musk first bought the platform.

According to emails listed in court documents, Musk told Todd Maronformer Tesla general counsel, that the extra pay was part of his much-vaunted effort to bring man to marswhich would only be possible “if I succeed in making Tesla one of the most valuable companies in the world”.

Musk has faced other lawsuits related to his activities. A jury ruled in favor from the owner of Tesla last month when they determined that his infamous “Funding Secured” tweet about Tesla’s privatization did not amount to fraud.

Musk still focuses a lot of his time on Twitter, although this company also faces numerous lawsuits for dismissal employees and owners of some of its properties around the world. Last January, a marketing company sued Twitter claiming that the company had stopped paying him for promotional items, including a nearly $7,000 “swag gift box” that was given to Musk during his first arrived at Twitter headquarters last October.according court documents filed in a California court. This invoice among the documents stated that the gift set included a $689 bottle of whiskey from Japan and a $215 cheese platter.

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