Musk testified in Delaware court on Wednesday claiming he had little say in the Tesla payout that helped him become the world's richest man
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Summary:
- Elon Musk testified that he was not involved in the pay negotiations.
- Shareholders claim the board is made up of Musks ‘pals’.
Musk testified on Wednesday
On Wednesday, Elon Musk testified that he was not involved in the negotiations among Tesla board members about a 2018 compensation plan that gave him billions in stock options and helped him become the richest person in the world. Speaking in a Wilmington, Delaware courtroom, Mr. Musk rebutted claims made in a shareholder complaint that the board of the electric car company was comprised primarily of his pals and other close associates who carried out his orders.
In the lawsuit in which Mr. Musk is testifying, the focus is on a compensation package that provided Mr. Musk stock options that allowed him the ability to purchase nearly $50 billion worth of Tesla shares if the firm fulfilled specific sales, profit, and share price gain benchmarks. The agreement was one of the biggest of its kind at the time, and many other business boards have used it as a model to reward top executives. Attorneys for the shareholder Richard Tornetta, who filed the lawsuit, claim in court filings that Mr. Musk began discussing his remuneration package with Ira Ehrenpreis, the director who oversaw the board's compensation committee, in April 2017.
Additionally, the plaintiff's attorneys claimed in court documents that Tesla directors and executives testified that the board did not anticipate Mr. Musk leaving the organization and had not started to find suitable successors to him.
The company's shares started rising substantially more than a year after the 2018 Tesla compensation agreement was implemented, increasing from about $21 to a record of about $410 in November 2021. Since then, it has decreased by roughly 50% and currently costs around $190.
Chancellor Kathaleen McCormick of the Delaware Court of Chancery is hearing the issue. She also ruled over the brief legal action Twitter brought against Mr. Musk in July to compel him to complete the acquisition of the social media giant after he attempted to back out of the transaction. Last month, Mr. Musk closed the transaction.
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SourceS: finance.yahoo.com, nytimes.com
