Musk is involved in a court case over pay that made him the world’s richest person

Tesla CEOs have violated their fiduciary duties for waste and exploited investors, a class action lawsuit filed by Tornetta

Musk entered March 2018, the month shareholders approved the compensation plan, at No. 41 on the Bloomberg Billionaire’s Index, due largely to his involvement in Tesla and SpaceX. At the time, Tesla was a promising but troubled automaker. It had lost $2 billion and was unable to overcome production delays as it produced its mass-market Model 3 sedan. Musk spoke of being in “production hell” as well as “delivery logistics hell” during the year, and joked about going bankrupt.

There will be discussion of Musk’s management style. He leads several ventures outside of Tesla: the aerospace company SpaceX; his tunneling venture The Boring Co.; a brain interface startup, Neuralink; and Twitter. It’s uncommon for executives to hold multiple CEO titles.

According to a professor who teaches corporate governance at the UCLA business school, the case is serious forTesla as it will be a heavy burden for them to prove compensation and the process to create it was fair.

Amazon CEO Andy Jassy was paid $212.7 million in 2021. Apple CEO Tim Cook received nearly $100 million last year. Microsoft CEO was paid more than 50 million dollars in a single year.

Tesla’s board of directors have claimed that it created the plan “after more than six months of careful analysis with a leading independent compensation consultant as well as discussions with Elon.”

Richard Tornetta, who originally filed the lawsuit in June 2018, claims that the Tesla board of directors has breached its fiduciary duties for waste, and Musk has breached his own fiduciary duties for unjust enrichment.

The lawsuit was certified as a class action case by the court in January 2021. The case has taken many years due to the nature of litigation, including the motion that was made by Tesla to dismiss the complaint.

She noted that Institutional Shareholder Services and Glass Lewis, advisory firms, both recommended in 2018 that Tesla stockholders reject the compensation plan.

“Given that that entire board is very much under the influence of Musk it’s hard to know that anything that they did would be following proper process,” she said.

On the fate of Musk, the CEO of Twitter, from the Delaware court of Chancery to the trial of the case about the acquisition of SolarCity by Tesla

The trial is expected to last a week. Chancery court judges at times rule from the bench, but that’s uncommon. It may take a while for a decision to be issued.

The Delaware Court of Chancery has become a regular stop for Musk. He almost went to trial on his acquisition of the social media site. He testified before the court in a case about the acquisition of SolarCity byTesla. A judge made a decision in Musk’s favor.

That’s the question remaining to be answered this Monday evening, more than 12 hours after an unscientific poll posted by the Twitter CEO resulted in 57.5% of participants voting that he should step down as head of the beleaguered social media company.

The move came after mounting criticism of his chaotic leadership at Twitter, including recent decisions to suspend journalists and introduce (and then delete) a controversial policy banning the practice of linking out to rival platforms; laying off half of the company’s staff; firing others who disagreed with him; and welcoming back onto the platform previously banned figures who trafficked in misinformation, conspiracy theories, and hate speech.

A version of this article first appeared in the “Reliable Sources” newsletter. The daily digest chronicles the evolving media landscape here.

The Elephant in the Room: Tesla CEO Colin Rusch and the Musk/TSLA Corrupt Scenario on Monday, April 24: Musk’s Twitter obsession with the company Shutdown

Given Musk’s propensity for tweeting, and his rapid decisions after previous polls, many expected he would have addressed the elephant in the room by now. But he has not. Musk refrained from posting on the social media platform for 18 hours on Monday.

The electric automaker bore the brunt of more bad news related to Musk’s Twitter obsession on Monday. Colin Rusch was an analyst for the company and he said that he believes Mr. Musk is increasingly isolated as the steward of the finances on the platform. A negative feedback loop could result from the departure of advertisers and users.

The public backlash that Musk has created could tarnish his brand, particularly with key consumer groups.

“We believe banning journalists without consistent defensible standards or clear communication in an environment where many people believe free speech is at risk is too much for a majority of consumers to continue supporting Mr. Musk/TSLA, particularly people ideologically aligned with climate change mitigation,” Rusch wrote.

The situation Musk now finds himself in could be good for some of his supporters, who would like him to go back to work at Tesla and get back to business.

He became one of the wealthiest people on the planet through lucrative options that allowed him to buy hundreds of millions of shares of stock if the company hit various financial and market value targets.

In 2012 he received 9 of 10 blocks of potential options and the package of options expired last year. And last month the company disclosed Musk received the last remaining block of options granted under an even more lucrative 2018 pay package.

Of course no one needs to sponsor a GoFundMe page to help him pay his bills. After all, he is the second-richest person on the planet, according to a real-time estimate by Forbes, behind only Bernard Arnault, head of the luxury brand empire LVMH. Musk has a net worth of about $198 billion, enough money to once again grossly overpay for Twitter if he’s so inclined.

And the better Tesla does under his leadership, the more he’s worth. He holds an option to buy another 304 million shares at a bargain base price of $23.34 per share, making him the largest shareholder in the company. Tesla stock closed Friday at $208.31.

“The board needs to send a signal; the street needs to have comfort that Musk is going to be dialed in as CEO of Tesla for the better part of the next decade,” said Ives.

There is a very talented team here. So I think Tesla would continue to do very well even if I was kidnapped by aliens or went back to my home planet,” he said, before adding, “So I’m not leaving, just to be clear.”

In the federal court case last November, board member James Murdoch testified that Musk has settled on an individual to be his successor, but did not reveal that person’s identity.

Amazon’s Jeff Bezos and Facebook’s Mark Zuckerberg, for example, both took large stakes in their companies as founders, but neither has received stock grants or options since those companies had initial public offerings in 1997 and 2012, respectively.

And, like Musk, they haven’t earned much in the way of salary. Bezos earned an $81,000 annual salary while he was CEO, and Zuckerberg has taken home a salary of $1 a year for most of the last decade.

At the tender age of 57, Bezos gave up the CEO job at Amazon and remains executive chairman of the company. With a net worth of approximately $213 billion, it is not certain that any pay package would have kept him on the job.

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