The case has been dragging on for five years, when Richard Tornetta, one of Tesla’s shareholders, appealed against the remuneration package for Elon Musk awarded to him in 2018. According to the management board’s decision, the billionaire was to receive an attractive offer of options to purchase Tesla shares, which are currently worth approximately $55.8 billion, for his work.
The court found that Musk earns too much. “Captured by the rhetoric” and the attractiveness of the “superstar”
A court in the US state of Delaware has now ruled – in line with the plaintiff’s arguments – that the billionaire’s remuneration package was overestimated. The lawsuit argued that Tesla’s board could have convinced Musk to work for less or – if he did not agree – look for another managing director in his place. The plaintiff also believes that the board should have forced Musk to work for Tesla full time. However, the eccentric entrepreneur runs several companies at the same time – currently primarily SpaceX, Neuralink, The Boring Company and X (formerly Twitter) – devoting some of his time to each.
The justice system admitted that Tesla’s board actually made no attempt to convince Elon Musk to serve as Tesla’s CEO for a lesser amount. Moreover, according to the court, Musk has significant influence over the management board and its members, which meant that the management board could not make decisions regarding the billionaire’s remuneration completely independently.
, the deal just in question was by far the largest compensation package for a CEO in Tesla’s history. Thanks to her, Musk has become one of the richest people in the world. Tesla’s authorities argued that such an amount was necessary to retain the billionaire and convince him to continue running the company. However, the judge found that the board was “carried away by the rhetoric” of growth and the attractiveness of “superstar” Musk, so it agreed to an “unfathomable sum” that was unfair to the company’s shareholders.
The billionaire is considering fleeing to another state. He did a survey on X
Shortly after the verdict was announced, Elon Musk expressed his dissatisfaction with the turn of events on the X website. “Never register your company in the state of Delaware,” he wrote. “If you prefer to let the shareholders decide things [spółki – red.]I recommend registering [jej – red.] in Nevada or Texas,” he added after a while.
The billionaire also asked his followers on the X website whether he should re-register Tesla from Delaware to another state, e.g. Texas, where the company has its actual headquarters (and one of its factories). “Should Tesla change its headquarters state to Texas, where its physical headquarters is located,” Musk asked. The vast majority (88.4% of almost 660,000 Internet users) answered “yes”.
Not transfers, but shares. This is where Musk gets his fortune from Tesla
, but according to the disputed agreement, he receives stock purchase options that Musk can use after Tesla achieves its goals. This makes the billionaire’s actual earnings – like – six times higher than the total amount earned by the 200 highest-paid executives in 2021.
The eccentric billionaire may still appeal the verdict to the Supreme Court in Delaware. However, if the court’s decision is upheld, Tesla will have to offer Musk a new contract.
Source: Gazeta
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