Shulou(Shulou.com)11/24 Report--

CTOnews.com, November 15, local time 14, Tesla shareholders sued Tesla CEO Musk 56 billion U.S. dollars salary trial in the Delaware court for five days, Musk himself will appear in court later this week. One Tesla shareholder said the compensation package set performance targets that Mr Musk could easily achieve, and shareholders were misled into approving the plan.

Richard Tornetta, Tesla's shareholder, hopes that the five-day trial in Wilmington will lead the court to rescind the pay package. Tornetta wants to prove that Mr Musk used his dominance over Tesla's board to dictate the terms of his bonus package.

According to court documents, the controversial point in the case is whether the pay package requires Mr Musk to work full-time at Tesla. Shareholders believe that Musk spent most of his energy on his other companies, such as SpaceX, tunnel startup Boring company, and so on.

Musk and several Tesla directors, including Ella Ira Ehrenpreis, who has been a director since 2007, are also defendants in the case, arguing that the compensation package is designed to allow the chief executive to guide Tesla's continued growth through substantial monetary compensation bonuses. The 2018 compensation package catalyzed a tenfold increase in Tesla's valuation, making it a trillion-dollar company at one time.

Musk is expected to appear in court as soon as Tuesday, Reuters reported. Interestingly, Tesla CEO, who oversaw Musk's $44 billion Twitter acquisition last month, will sit in front of Delaware Justice Kathaleen McCormick.

Legal experts believe that Musk is in a better position than the Twitter acquisition, and that the company's board of directors has relatively no restrictions on setting executive pay. However, when it comes to controlling shareholders, compensation packages must meet stricter legal provisions. When the compensation package was approved, Mr Musk owned 21.9 per cent of Tesla.

CTOnews.com has learned that the scheme allows Mr Musk to buy 1 per cent of Tesla shares at a discount each time he meets performance and financial targets. Musk achieved 11 of the 12 goals, and Tesla's market capitalization increased from $50 billion to $1, 000bn.

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