Elon Musk’s hard work at Tesla valued at $56 billion
Elon Musk took a few hours off Twitter on Wednesday to defend in court the huge compensation plan Tesla gave him in 2018, saying he worked hard on it during tough times and that the vehicle maker’s success electricity was far from guaranteed.
Tesla CEO Elon Musk arrives to testify at the Leonard L. Williams Justice Center in Wilmington, Delaware on November 16, 2022.
Oliver Contreras/AFP
“In times of crisis, the allocation of time changes depending on where the crisis is,” he noted at the start of his hearing in a Delaware court.
At the time the compensation plan was decided, as the automaker struggled to ramp up production, “my time was almost entirely dedicated to Tesla,” he claimed.
“The probability of survival (of the group) was extremely low”, also recalled the multi-entrepreneur who has repeatedly said that Tesla was in 2018 very close to bankruptcy.
He is being sued, alongside Tesla and certain members of the board of directors, by a shareholder who accuses them of having improperly authorized in 2018 “the largest compensation plan ever awarded to an executive”.
His entry was made discreetly: a black Tesla parked at the back of the enclosure, directly in a tent set up for the occasion. A few minutes later, in a black suit and tie, he quietly passed through security at the door of the courtroom before settling in the box for those called to testify.
He was supposed to speak in this same room during a lawsuit opposing him to Twitter, before he decided to honor his commitment and pay 44 billion dollars to buy the social network at the end of October.
56 billion
The compensation plan in question plans to pay Elon Musk Tesla shares based on the achievement of several objectives over ten years, a plan estimated when it was adopted at $ 56 billion.
Enough to fuel his fortune and help him rise to the rank of the richest man in the world.
According to the plaintiff, Richard Tornetta, Elon Musk dictated his terms to directors who, given their relationship with the iconic entrepreneur or their personal interests, were not independent enough to oppose it. And this when he did not even work full time for Tesla insofar as he is also at the head of the space company SpaceX and the start-ups Neuralink and The Boring Company.
Richard Tornetta requests the cancellation of the plan.
Lawyers representing the defendants argue that Elon Musk’s compensation plan is tied to company performance, and that it has worked perfectly as Tesla’s value has increased more than tenfold since its inception. adoption.
At the hearing, Mr. Musk also claimed not to have been involved in the development of the compensation plan. The plaintiff’s lawyer, however, showed the hearing documents suggesting that he discussed it with Tesla’s board and chief legal officer.
Cacophony at Twitter
The trial, without a jury, began Monday with the testimony of Ira Ehrenpreis, head of compensation on the board of directors of Tesla, followed among others on Tuesday by that of the current president of this body, Robyn Denholm. James Murdoch, the son of media mogul Ruport Murdoch, is also expected to speak.
The judge in charge of the case is Kathaleen McCormick, who also took care of the file opposing Elon Musk to Twitter. She will make her decision later, in a few weeks or a few months.
It is ‘highly unusual’ for complaints about executive compensation to reach the trial stage as they are often settled or dismissed by judges who generally view them as strategic decisions, notes Jill Fisch , professor of business law at the University of Pennsylvania.
But in this case, the court ruled that the fact that Elon Musk owns around 22% of Tesla shares and is its chief executive “could have an undue impact” on the board of directors and on other shareholders, she indicates.
The lawsuit comes at a time when Elon Musk has been under severe pressure since his acquisition of Twitter in late October, between the departure of more than half of the employees, the flight of advertisers, warnings from various authorities and the confused launch of new products.
AFP
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