A Tesla director and former executive defended Elon Musk's $56 billion payout package in court. The suing shareholder has claimed that the CEO dictated the terms of the deal in order to fund his dream of traveling to Mars.
The plaintiff Richard J. Tornetta is hoping to prove in court that Tesla CEO Elon Musk used his influence on the company's board of directors to develop its 2018 compensation package. In addition, he claims that Musk tricked investors into approving the package. The plaintiff only owned four shares when he sued in 2018.
The trial of the case began on November 14 at the Delaware Court of Chancery in Wilmington. On the first day, testimony was given by Ira Ehrenpreis, a Tesla director in 2007, who was forced to explain why the board did not demand that Musk dedicate himself to the company full-time. She explained that achieving the set goals did not require him to put in a certain number of hours at work. Musk and the board of directors were focused on achieving goals, not on time spent at Tesla.
“We never had the kind of relationship with Elon where he was punching the clock,” said Ehrenpreis, who chaired the committee that developed the pay package, according to Reuters.
While Musk is also the CEO of the rocket company SpaceX and founder of the tunneling venture The Boring Co, he always devotes his time to what is needed at a particular time. For example, at the time when Tesla launched and increased production of Model 3, Musk literally lived for three years in factories in Fremont and Nevada, sleeping either on the roof, or under the table in the office, or on the floor in the middle of the production hall. This is the best demonstration of his dedication to the cause because Tesla is his brainchild.
Tornetta demanded that Musk's $56 billion compensation package that the CEO earned for making the company successful be canceled. Musk got the company through its most critical times, keeping it from going bankrupt—a very real threat that some legacy automakers also faced. Musk’s high success with the company continued, boosting its market capitalization and leading to a tenfold rise in its share price.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.