Tesla headed to court on Monday over Elon Musk’s 2018 compensation package, taking place at Delaware’s Court of Chancery in Wilmington, according to a report from CNN.
Musk will testify on Wednesday about the $56 billion compensation deal, which the plaintiffs call the largest pay package ever offered by a publicly traded company. The net value of the compensation package is about $50.9 billion.
The lawsuit was lodged by Tesla shareholder Richard Tornetta, claiming that the automaker’s board of directors breached fiduciary duties over waste, with Musk’s payment also breaching fiduciary duties to the company for his own personal enrichment.
Judge Orders Tesla to Provide Documents for Elon Musk’s $55 Billion Compensation Plan https://t.co/aVFj1WafIf
— TeslaNorth.com (@RealTeslaNorth) May 4, 2021
Tornetta claims that the board of directors didn’t have sufficient independence from Musk, as it included Elon’s brother Kimbal and friends Anthony Gracias and Steve Jurvetson — the latter two of which have since left the automaker’s board.
Additionally, Tornetta alleges that Musk’s pay package is meant to “fund his personal ambition to colonize Mars,” as Musk works with several companies beyond Tesla, including SpaceX, The Boring Company, Neuralink and now Twitter.
The trial will last about a week, though it could take weeks to months before Judge Kathaleen McCormick comes to a decision on the case.
Musk’s compensation package is based on a multi-level tranche options system that increases in value with each quarterly milestone reached by Tesla.
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