It was such a piece of awfully shocking news that the largest executive-pay package in the entire US corporate history was born in a text message from out of the blue by Elon Musk and he scored a hefty handsome amount of $55 billion. But now things have turned pretty into a fire when one of the shareholders filed a lawsuit and let us see what really happened among the corporates. Will Elon Musk has to taste his own medicine is yet to be clarified.
It all started on April 8, 2017, when one of the lawyers of the board members of Ira Ehrenpreis put forth a question regarding an email sent by Elon Musk to Todd Maron who was the then-chief executive officer of the company, in which Musk questioned the package of the company.
According to the bylaw of the company, if a particular investor dared to ask or vote against the package, then without any second thought they told that those who questioned weren’t welcome to the company anymore.
So as casual as it may sound Elon Musk replied that he would end up owning ten percent of the company. This idea was invented in a performance plan built around a progression of targets and it would grant him one percent of Tesla’s immeasurable shares as per the court filing.
The key question at the center of the lawsuit filed against Elon Musk headed on Monday has Had Elon Musk granted himself the hefty amount of $55 billion? As per one of the emails that he has sent to one of the co-founders Elon Musk ruminate over something and undoubtedly he would be planning on something really crazy and repugnant, and of high risk.
The Ethrenpreis who was also copied in that email said that he didn’t even understand that it was like a threat against all of the big shareholders and it is still so weird why Elon Musk got super worked over the one investor specifically.
The Ethrenpreis stated that the board discussed the issue related to Elon Musk’s compensation with the company’s most valuable institutional investors and they all concurred on the necessity to keep Musk at Tesla.
So now this month really turned out as a trial drama-filled month for the vociferous Elon Musk who just made a massive controversial acquisition of Twitter for $44 billion. He did this to plunge social media into chaos. Following the insufferable chaos the threat of bankruptcy, personal and product upheavals, and the washing away of advertisers are quite the conundrum Twitter faces.
Elon Musk’s Takeover Turned Into Insufferable Chaos
The conundrum now the chief executive faces is whether Tesla’s board had failed miserably to pay their duty in settling the CEO’s compensation and lost to exercise his freedom from Musk as he draws a totally new package.
The root cause of the trial is when one of the shareholders vehemently claimed that Tesla’s board has failed unapologetically to exercise independence from Elon Musk and now it draws a new package of the suave and resplendent chief executive officer.
Now Elon Musk will have to testify at the trial and the strongest man, by all means, has acknowledged that he had little to be afraid of here and he said that “Me negotiating against myself”. It was the way he described the whole process according to the court filings Elon Musk knows. So the impending trial would really have a toll on Elon Musk’s career.
As per sources, if Judge Kathaleen St J McCormick is the judge and if she sides with one of the shareholders who has been accused desperately the impropriety of the board then she would be vested with the power to order Elon Musk to pay back all of the stock to Tesla.
It should be taken into consideration that Kathaleen McCormick was the same vociferous judge who presided over the feud between Elon Musk and Twitter and she was the one who decided to make the issue shutdown when all Elon Musk was trying to step back from his decision to take over Twitter.
So in return for Elon Musk’s lucrative payback, the board members have said that they need to keep the CEO who doesn’t take a petite amount of money as salary from Tesla who is so focused on the growth of the company.
Elon Musk who is a peripatetic billionaire who is devoid of leisure time and spends his ample time focusing on other startups will lose something in the middle if he tries to attain everything along the way. The other startups include aeronautics firm Space Exploration Technologies Corporate, Boring Co, Neuralink Corporate, and now Twitter.
So these lawsuits targeting executive compensation usually come across a high bar, because usually, these sorts of packages are contingent when it comes to the ambiguous share-price targets. So as per Delaware law, the directors usually get the latitude to have their business judgment to set the pay. But here it is true that the amount that Elon Musk has attained would be a headache for its own cause.
Elon Musk’s irresponsibility in not giving some of his time and energy to focus on Tesla has brought the company’s image at stake and the fundamental reason for losing focus on Tesla was his Twitter takeover.
The lawsuit was filed by Richard Tornetta who has been holding nine Tesla shares since 2018 and is into selling car parts. His lawyer said that Richard was threatened online for coming up with a case against Elon Musk. when Tesla’s share hit a tremendous low it really affected the people and the net worth of Elon Musk dropped to $200 billion when his net worth was $340 billion before it.