Elon Musk's $56B Pay Could Be Voided With A Single 'Kill Shot' - Tesla (NASDAQ:TSLA)

Elon Musk’s $56B Pay Could Be Voided With A Single ‘Kill Shot’ – Tesla (NASDAQ:TSLA)

A single material misleading disclosure to shareholders could put an end to Tesla Inc. TSLA CEO by Elon Musk $65 billion paid.

What happened: Chancellor Kathleen McCormickjudge at the Delaware Court of Chanceryasked lawyers for the directors of Tesla and the investor challenge Musk’s salary whether the automaker’s rapid growth outweighed misleading compensation plan disclosures in 2018, Reuters reported.

The investor’s lawyer, Richard Toretta, reportedly told McCormick that because Musk’s compensation plan was based on a shareholder vote, any material misinformation given to shareholders should result in the cancellation of the plan.

The plan allows Musk to buy 1% of Tesla stock at deeply discounted rates whenever he meets certain performance and financial goals.

Why is it important: McCormick called the lawyer’s argument a “killer blow” and called it “elegant,” but expressed skepticism at the same time. The judge asked both parties to give him an additional briefing on the argument, Reuters reported.

Lawyers for the Tesla directors reportedly said Tornetta did not dispute key details of the power of attorney that crafted the plan, such as the goals Musk had to meet for the payment to go into effect.

Lawyers asked McCormick to consider whether the plan was fair to shareholders since it resulted in a 10-fold increase in Tesla’s stock price, according to the report.

Musk, who testified at the trial, reportedly told the court that he viewed the salary package as a way to fund his goals of interplanetary travel.

Price action: On Tuesday, shares of Tesla closed down 5.25% at $197.37 in the regular session, according to Benzinga Pro data.

Read more : Tesla analyst sees ‘monster’ compensation package for Elon Musk – it may be a good thing

Photo by Steve Jurvetson on Flickr

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