Tech

Elon Musk defends $56 billion salary, says some Tesla decisions made without board nod


Elon Musk said in court on Wednesday that he made some decisions by Tesla Inc without the approval of the company’s directors, as he defended a $56 billion (approximately $56 billion) payment package. Rs 4,56,800) in the face of claims that he had presented its terms to a compliance panel.

Tesla shareholder Richard Tornetta sued musk and the board in 2018, and hopes to demonstrate that Musk used his dominance of Tesla’s board to get a superior compensation package that doesn’t require him to work full-time. time at the electric car manufacturer.

When questioned by Tornetta’s attorney, Greg Varallo, Musk refuted claims that his salary package goals were easy to achieve.

“Words cannot describe this pain,” Musk said almost in a whisper, describing the effort it took to bring the company from the brink of failure in 2017 to explosive growth. “It’s pain that I don’t want to cause anyone.”

Varallo repeatedly sought to portray Tesla as a company controlled by Musk, the richest man in the world, and tried to show that Musk had repeatedly bypassed Tesla’s board.

For example, Musk said he made a unilateral call for an end to Tesla’s acceptance Bitcoin cryptocurrency and admitted that the board was uninformed when he told analysts in October that Tesla’s board was looking at up to $10 billion worth of stock buybacks ( around 81,600 rupees).

But the testimony does not definitively prove who developed Musk’s 2018 pay plan or determine whether it was the product he demanded, rather than negotiate with the board.

The five-day trial comes as Musk is struggling to oversee a chaotic overhaul of the company Twitterwhich he was forced to buy for $44 billion (approximately Rs 3,58,900) in a separate legal battle before the same judge, Prime Minister Kathaleen McCormick, after attempting to back out of that deal.

Musk tweeted this week that he’ll be staying at Twitter’s San Francisco headquarters around the clock until he fixes that company’s problem and said Wednesday he’s been to Delaware on a flight. fly overnight from the social media company.

Musk said his focus on restructuring Twitter will end soon and he will find someone else to lead it. He rejected the argument that his pay agreement should have obligated him to spend a certain number of hours at Tesla.

“I work pretty much all the time,” he said. “I don’t know what a chronograph would achieve.”

While Musk has a history of objectionable testimony, calling the attorneys “reprehensible” or “a bad person,” he was relatively restrained during Wednesday’s proceedings, though at times expressed his displeasure. frustrated with Tornetta’s attorney.

At one point, Musk told the plaintiff’s attorney, “your question is a complicated one that is often used to mislead people.”

Musk acknowledged that he’s not a lawyer but added, “when you get into enough lawsuits, you get a few things up.”

A ‘product genius’

Tornetta asked the court to cancel the 2018 package that his lawyer said was $20 billion (about Rs 1,63,100 crore) larger than Delaware’s annual gross domestic product.

Musk’s legal team and Tesla executives launched the pay package as a set of bold goals that worked by driving a 10-fold growth in Tesla’s stock value to more than $600 billion. (approximately Rs 48,92,800) from around $50 billion (approximately Rs 4,07,700 crore).

They argued that the plan was developed by independent board members, advised by outside experts and with input from major shareholders.

Tornetta’s attorneys tried to prove that Musk was involved from the start. An email from May 2017 appears to confirm that Musk pushed ahead with the pay plan months before the board negotiated with him.

“I’m planning something really crazy, but also high-risk,” he wrote.

Antonio Gracias, a venture capitalist and longtime friend of Musk and a Tesla board member from 2007 to 2021, testified after Musk testified.

Gracias said he’s ready to push back on Musk if necessary. “I don’t quarrel with any of my CEOs,” he told the court.

The controversial Tesla package allows Musk to buy 1% of Tesla shares at a deep discount each time his financial and performance goals escalate. Otherwise, Musk gets nothing.

According to court documents, Tesla achieved 11 of the 12 goals.

Shareholders generally cannot challenge executive compensation because the courts often delay the directors’ judgment. Musk’s case survived a motion to dismiss because it was determined that he could be treated as a controlling shareholder, which means stricter rules would apply.

Gracias described Musk as essential to the company’s success in his testimony, calling him “extraordinary” and a “product genius.”

© Thomson Reuters 2022


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