Tesla shareholder Richard J. Tornetta is suing Tesla, alleging that CEO Elon Musk’s pay was excessive and breached fiduciary duties, according to a report from CNBC.
The pay package in question granted options worth about $2.5 billion to Musk, and consisted of the CEO’s 101.3 million stock options plan which pays out in 12 milestone-focused tranches based on Tesla’s performance in the market.
Upon reaching market value milestones in 2020 and skyrocketing shares, payouts to Musk began and ultimately made him the world’s richest person.
Tornetta claims Tesla board members had conflicts with the plan that went undisclosed, despite the fact that Musk crafted his own plan with Tesla’s general counsel and Musk’s former divorce attorney Todd Maron.
A trial over the claims will begin on April 18 at a Delaware Chancery Court, after court chancellor Kathleen St. J. McCormick canceled oral arguments precluding a trial.
In a letter, 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.” McCormick added, “This case is going to trial.”
In class action lawsuits, the actual plaintiff is always the class action law firm. They just find someone willing to serve as a puppet to “represent the class”.
— Elon Musk (@elonmusk) March 3, 2022
Tesla is currently also facing a racial discrimination lawsuit from the California Department for Employment and Housing (DFEH) over practices at its Fremont factory, in addition to ongoing probes from the National Highway Traffic Safety Administration (NHTSA) and the Securities and Exchange Commission (SEC).
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