Tesla tycoon Elon Musk is due to comment on his $50 billion salary package as the electric-car giant’s CEO in a lawsuit on Wednesday.
Musk will testify in the same Delaware court where he faced a lawsuit from Twitter to ensure he carried out the takeover of the social platform.
The $44 billion Twitter purchase has put Musk under scrutiny after conducting massive layoffs, scaring advertisers and opening the platform to fake accounts.
The Tesla independent case follows a complaint from shareholder Richard Tornetta, who accused Musk and the company’s board of failing to approve the pay plan.
Tornetta claims Musk dictated his terms to directors who weren’t independent enough of their star CEO to object to a roughly $51 billion package at recent stock prices.
The Tesla shareholder has accused Musk of “unjust enrichment” and called for the cancellation of a pay program that helped make the businessman the richest man in the world.
According to a court filing, Musk earned the equivalent of $52.4 billion in Tesla stock options in four and a half years after achieving virtually all of the company’s goals.
When the plan was approved, it was valued at a total of $56 billion.
The trial without a jury began Monday with testimony from Ira Ehrenpreis, head of the Compensation Committee on Tesla’s board of directors, who said the goals set were “extraordinarily ambitious and difficult.”
Ehrenpreis argued that the board wanted to spur Musk on to focus on Tesla at a time when the company was still struggling to get a foothold.
– “Very unusual” –
The trial will last through Friday and will be presided over by Judge Kathaleen McCormick, the same judge who was set to preside over Twitter.
There is no deadline for their decision, which could take months.
It is “highly unusual” for such a case to go to trial, Jill Fisch, a law professor at the University of Pennsylvania, told AFP.
“There aren’t that many successful executive pay challenges because the courts have typically treated it as a business decision,” she added.
But the court found in this case that Musk’s ownership of about 22 percent of Tesla and his role as CEO could have “undue effects” on the board and other shareholders, she noted.
Musk canceled a personal appearance Sunday at an event on the sidelines of the G20 summit in Bali to face a court case.
When asked why he hadn’t traveled to the tropical Indonesian island, the new Twitter boss joked that his “workload has picked up quite a bit lately” after taking over the social media giant.
