
A lawsuit began on Monday over allegations by shareholders that Tesla CEO Elon Musk’s $56 billion salary was rigged with easy-to-achieve performance targets and that investors were duped into approving it, AFP reported.
A Tesla shareholder hopes to prove in a five-day trial that Musk used his dominance of the electric car maker’s board of directors to dictate the terms of a 2018 package that didn’t even include his full-time employment at Tesla.
Musk, the world’s richest man, will testify on Wednesday, Greg Varallo, an attorney for shareholder Richard Thornett, said Monday in a Wilmington, Delaware, courtroom.
The process began when Ira Ehrenprice, a Tesla board member since 2007 and chairman of the committee that oversaw the pay package, described the process of reaching the record salary deal.
“I wanted to make sure that Elon remained the leader of Tesla for a longer period of time,” Ehrenprice said.
Elon Musk earns as much as the top 200 CEOs combined
A short video clip of Musk’s testimony in the case was shown in court. He recounted how Ehrenprice called him to discuss creating a salary package in lieu of a 2012 compensation deal that was close to being finalized.
Musk said he offered Ehrenpreis “a larger amount but with much more complex milestones” than the 2012 deal.
According to Amit Batish of research firm Equilar, Tornette has asked the court to throw out the pay package, which is six times the pay of the top 200 CEOs combined in 2021.
Musk and Tesla executives, who are also defendants, deny the allegations. They argued that the pay package did what it was intended to do — ensure that the entrepreneur successfully steered Tesla through a critical period, helping the stock increase tenfold.
The lawsuit, filed by Tesla shareholders, claims the pay package should have required Musk to work full-time at Tesla.
The company’s shareholders are concerned that Musk is being distracted by Twitter, which he has warned may not survive an economic downturn.

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