Elon Musk's $55 BILLION Tesla Pay Package Spoiled by Conflicts of Interest, Investor Claims
The decision by Tesla Inc. directors to authorize a $55 billion pay package for Chief Executive Officer Elon Musk in 2018 was marred with conflicts of interest and improper disclosures about the performance benchmarks he'd be held to, a disgruntled investor argued in a court filing.
Musk, the world's richest person and Tesla's largest shareholder, must face a Delaware judge at a Nov. 14 trial over the claim by investor Richard Tornetta, who claims the billionaire engineered the windfall pay deal by pushing it through a “supine board.”
Musk dictated the “framework and financial terms, which remained fundamentally unchanged” throughout the board's approval process, Tornetta's lawyers said in a Delaware Chancery Court brief unsealed Wednesday.
Legal experts say the case will spotlight the role of courts in regulating executive compensation, and shine a light on the Musk's peripatetic management of Tesla and other companies he owns. Last month, the entrepreneur closed his $44 billion acquisition of social-media platform Twitter Inc.
The case is being heard in Delaware because Tesla, like Twitter, is incorporated in the state, the corporate home to more than half of US public companies and more than 60% of Fortune 500 firms. Its Chancery judges are business law experts who hear cases without a jury, often on a fast-track basis.
Delaware Chancery Court Judge Kathaleen St. J. McCormick -- who was overseeing Musk's Twitter litigation -- will review testimony about his Tesla pay package and decide whether it amounted to a waste of corporate assets.
In their pre-trial filing, Musk's lawyers denied Tornetta's claims the compensation package was excessive. They said he was a unique manager and deserved a bespoke pay plan based on Tesla's
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