Elon Musk back in court over $1 trillion Tesla pay deal

Tesla, SpaceX and HyperLoop – and now Twitter – owner, Elon Musk will face a week-long trial in the Delaware Court of Chancery over a $56 billion (R1 trillion) Tesla compensation grant.

The pay deal from Tesla’s board of directors back in 2018, made Musk the richest man in the world at the time, a title he still holds today.

It is also the largest compensation package from a publicly traded company in the history of the world.

Elon Musk’s Tesla pay deal

Musk will appear before Kathaleen McCormick, the same judge who forced him to honour his Twitter contract when he threatened to cancel the deal.

Alongside current and former Tesla directors, Musk will have to defend the compensation package.

This after Tesla stakeholder Richard Tornetta filed suit to rescind Musk’s pay deal back in 2019, claiming it was “unjustly paid” to the billionaire.

Allegations denied

Tornetta submitted a 96-page legal brief, stating the Tesla board failed to perform its fiduciary duty to investors by green-lighting the compensation grant.

In order to receive the package, which consisted of 12 batches of stock, Musk had to reach Tesla’s market capitalisation and earned revenue milestones.

Musk and the Tesla directors in the firing line denied any allegations of wrongdoing, stating he had reached several of the stipulated milestones.

The billionaire was on target with other deadlines and should have all boxes checked by the end of the year. That, however, is not the issue.

Conflict of interest

While a large compensation package isn’t unheard of (although in this case, it is), the issue is whether the deal was above board, considering Musk was on both sides of the transaction.

He was a chairman of the Tesla board and held a 22% stake in the company while also being on the receiving end of the deal.

Musk is juggling the Tesla pay deal case while also juggling his responsibilities at Twitter, SpaceX, the Boring Company, and several other lucrative slices of pie.

Twitter saga

To be fair, Musk himself said ‘Twitter will do lots of dumb stuff in the coming months’. We just didn’t know he was being serious.

Since becoming ‘chief twit’, Musk fired half of Twitter’s employees (before calling some back to the office) and became the sole director.

He then caused a global outcry by implementing a paid verification feature (at a cost of $8) before rolling out a new Official label and cancelling it within hours.

The verification drama has led to all sorts of chaos, such as the rise of fake accounts and hate speech. Heck, even Jesus Christ was verified and at some point, Musk begged Stephen King to stay.

Musk claims to have done all of this to save humanity, making off with a R1 trillion pay deal.

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