A lawsuit filed against Elon Musk over his compensation package at Tesla is set to be held in a Delaware Chancery Court, as overseen by Judge Kathaleen St. J. McCormick — the same judge who was set to preside over Musk’s Twitter trial.
Tesla shareholder Richard Tornetta filed the lawsuit against Musk, claiming that the CEO’s $56 billion compensation package in 2018 was excessive, calling it “the largest compensation grant in human history,” according to a report from Tech Crunch (via Entrepreneur).
Originally filed in 2019 and set to begin on November 14, Tornetta is referring to Musk’s unique tranche-based options pay package, which was approved in January 2018 and offered Musk around one percent of Tesla’s outstanding shares for each goal reached in a series of 12 performance targets.
Elon Musk Sells $3.95 Billion Worth of Tesla Shares After Twitter Deal https://t.co/NBYRoNjmwI
— TeslaNorth.com (@RealTeslaNorth) November 9, 2022
The news also comes just weeks after Twitter nearly went to trial with Musk over his backing out of a purchase deal, before he elected to complete the deal and took over the social media company last week.
Tornetta’s suit also alleges that Musk’s acquisition of Twitter now renders him too full of a plate to adequately deliver on such a huge compensation package.
Both Twitter and Tesla are incorporated in Delaware, along with most large corporations, due to the unique tax benefits offered within the state.
“The plan designed and approved by the board was not a typical pay package intended to compensate the ordinary executive for overseeing the day-to-day operations of a mature company,” wrote Musk’s attorney Evan Chesler in a filing. “That is because Musk is not the typical CEO.”
