Elon Musk is facing a new trial over the CEO’s 2018 pay package which was worth around $2.5 billion. Shareholder Richard J. Tornetta sued Tesla’s CEO and its board after the package was cleared.
The suit claimed that the authorization by the company’s board of directors was a breach of its fiduciary duty.
The performance award of Tesla’s 2018 CEO consisted of 101.3 million stock options in 12 milestone-based tranches. However, if Musk reached those milestones, which focused on Tesla’s market value and operations then he will get the money. But if he didn’t, he will get nothing.
Since then, Tesla shares were raised extremely, and Musk’s payouts began in 2020. That was an essential reason for making Musk the richest person in the world.
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Now, Tornetta is working to invalidate the option grant from the 2018 plan. He claimed that Tesla board members had undisclosed conflicts. He also said that Musk crafted his own pay plan in agreement with his personal assistance and Tesla’s general counsel, Todd Maron.
Musk’s Attorneys asked the court for a summary judgment and attempt to have the case dismissed. But it didn’t go as they want. Feb. 24, a letter from court chancellor Kathleen St. J. McCormick wrote, “I am skeptical that this litigation can be resolved based on the undisputed facts. So, I am canceling oral argument on the summary judgment motions.” She added, “This case is going to trial.”
According to the legal transparency database PlainSite, the court scheduled the trial to be on April 18, in the Delaware chancery court. But that date is not final and could change.