Tesla tycoon Elon Musk will step down as CEO of the electric car giant on Wednesday as part of a trial over his $50 billion pay package.
Musk will testify in the same court in Delaware that he faced a lawsuit against Twitter to ensure that he bought the social platform.
Twitter’s $44 trillion acquisition has put Musk under prolonged scrutiny after he made mass layoffs, scared off advertisers and opened up the platform to fake accounts.
The unrelated Tesla case is based on a complaint by shareholder Richard Tornetta, who accused Musk and the company’s board of directors of failing in their duties when they authorized the paid plan.
Tornetta said Musk imposed his terms on executives who were not independent enough from his star CEOs to contest a package worth about $51 trillion at recent stock prices.
Tesla shareholders accused Musk of “unjustified enrichment” and called for the cancellation of a pay program that helped make the entrepreneur the world’s richest man.
According to a legal filing, Musk earned the equivalent of $52.4 billion in Tesla stock options over four and a half years after meeting all of the company’s goals.
When the plan was approved, it cost a total of $56 trillion.
The non-jury trial began Monday with testimony from Ira Ehrenpreis, the head of Tesla’s board of directors’ compensation committee, who said the targets set were “ambitious and challenging.”
Ehrenpreis argued that the board wanted to push Musk to focus on Tesla at a time when the company was still struggling to gain traction.
The trial will continue until Friday and is presided over by Judge Kathaleen McCormick, the same judge who was supposed to preside over the Twitter case.
There is no deadline for his decision which could take months.
AFP
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