A trial for the assignment to Elon Musk of a compensation plan that awards him more than 50,000 million dollars in Tesla shares based on performance criteria began this Monday in a court in Delaware (United States). A shareholder of the electric car manufacturer, Richard Tornetta, filed a complaint in 2018 alleging that the contractor and the company’s board of directors had not respected their obligations when they authorized this program.
According to him, Elon Musk dictated his terms and the directors, given their relationship with the contractor, were not independent enough to object. Also accusing Elon Musk of “unjustified enrichment”, Richard Tornetta calls for the cancellation of this plan that would supposedly extend to ten years.
Elon Musk must testify on Tuesday
According to a document from his lawyers dated early November, the plan netted the Tesla boss, and the world’s richest man, the equivalent of $52.4 billion in stock options in four and a half years after nearly achieving all targets. This plan was valued at a total of $56 billion when it was adopted.
The trial, without a jury, will last five days under the presidency of Kathaleen McCormick, the magistrate who directed the procedure that opposes Elon Musk to Twitter. Having finally agreed to buy the social network for 44 billion dollars, as she had promised, the trial related to this case did not take place.
In the case of his remuneration, Elon Musk is supposed to testify on Wednesday morning. Expected at an event scheduled on the sidelines of the G20 summit in Indonesia, the billionaire warned organizers that he could not attend in person due to this legal obligation. During an intervention by videoconference, the new head of Twitter joked that his “workload (had) increased a lot recently” since he acquired Twitter. Elon Musk is also the head of space company SpaceX and of startups Neuralink and The Boring Company.
On Monday, the process began with testimony from Ira Ehrenpreis, head of Tesla’s board of directors’ compensation committee. He is being prosecuted alongside Elon Musk, but also current Tesla chairman Robin Denholm, as well as current and former board members James Murdoch, Linda Johnson Rice and Brad Buss. Lawyers representing the defendants argue that Elon Musk’s compensation plan is tied to the company’s performance, including on the stock market, and that it worked perfectly as Tesla’s value increased by more than tenfold since its adoption.
Source: BFM TV
