Elon Musk Plans To Testify In US Court About His $50 Billion Tesla Pay Package
Tesla tycoon Elon Musk will take the post on Wednesday as part of a hearing over his $50 billion paycheck as CEO of the electric car giant.
Musk will testify in the same Delaware court where he faced the Twitter lawsuit to ensure he goes through with his purchase of the social media platform.
The $44 billion (roughly Rs. 3.6 lakh crore) acquisition of Twitter has put Musk under intense scrutiny after he made massive layoffs, which scared advertisers and opened up the platform to fake accounts.
The unrelated Tesla lawsuit is based on a complaint by shareholder Richard Tornetta, who accused Musk and the company’s board of directors of failing to do their job when they approved the payout plan.
Tornetta says Musk set his sights on directors who were not independent enough from their star CEO to oppose a package worth around $51 billion (roughly Rs. 4.14 lakh crore) at recent share prices.
A Tesla shareholder has accused Musk of “unjust enrichment” and called for the pay plan that made the businessman the world’s richest man to be scrapped.
According to an official filing, Musk earned the equivalent of $52.4 billion (roughly Rs. 4.26 lakh crore) in Tesla stock options over four-and-a-half years after all the company’s targets were met.
When the plan was approved it was estimated at $56 billion (roughly Rs. 4.6 lakh crore).
The non-jury trial began on Monday with testimony from Ira Ehrenpreis, head of the compensation committee on Tesla’s board of directors, who said the targets set were “extraordinarily ambitious and difficult”.
Ehrenpreis said the board wanted to encourage Musk to focus on Tesla at a time when the company was still struggling to gain traction.
The trial will continue until Friday and will be presided over by Judge Kathaleen McCormick, the judge who was to preside over the Twitter case.
There is no deadline for his decision which can take months.
“It’s very unusual” for this type of case to go to trial, Jill Fisch, a law professor at the University of Pennsylvania, told AFP.
“There aren’t all that many successful challenges to executive compensation (as) courts tend to treat this as a business decision,” he added.
But the court found in the case that Musk’s ownership of about 22 percent of Tesla and his role as CEO would have “undue influence” on the board and other shareholders, he noted.
Musk canceled his personal appearance on Sunday at the G20 side event in Bali that was to be held in court.
Asked why he didn’t go to a tropical island in Indonesia, Twitter’s new boss joked that “his work just got bigger” after he took over the social media giant.