Tesla CEO Elon Musk is headed to court again, this time to defend his $56 billion payment package against claims that it unjustly compensates him for being a “part-time CEO.”
The allegations come from Tesla shareholder Richard Tornetta, who is seeking to rescind the 2018 pay deal, claiming Tesla’s board set easy performance targets and Musk designed the package to fund his space exploration program, SpaceX.
Tesla has responded by pointing out that the package delivered a 10-fold increase in value to shareholders. The company’s value has grown from $50 billion to $650 million.
Tornetta’s lawyers cited Musk’s testimony from 2018 in which the CEO stated he worked at Tesla Tuesday, Wednesday, and Friday and spent Mondays and Thursdays at SpaceX.
According to the lawsuit, Tesla’s Board Chair Robyn Denholm described Musk’s minimal time spent at the company as “becoming more and more problematic” in a 2018 email to Gabrielle Toledano, Tesla’s Chief People Officer at the time.
Musk’s current pay package allows him to purchase 1% of Tesla’s stock at a deep discount every time escalating performance and financial targets are met, something Tesla has managed 11 out of 12 times. Musk’s vested grants have a value of $50 billion, according to Amit Batish at Esquilar, and make up a large percentage of his $200 billion fortune.
The case is scheduled for November 14 and will be overseen by Judge Kathaleen McCormick, the same judge who presided over Twitter’s lawsuit against Musk regarding his $44 billion purchase agreement for the social media platform.
Did you enjoy this article? Please share your thoughts, comments, or questions regarding this topic by connecting with us at newsroom@cbtnews.com.
Be sure to follow us on Facebook, LinkedIn, and TikTok to stay up to date.
While you’re here, don’t forget to subscribe to our email newsletter for all the latest auto industry news from CBT News.
