It is not often that people get a massive $55 billion payday, and it is proving contentious for Elon Musk. The billionaire CEO was dragged to court over his jumbo compensation by shareholders claiming the Tesla board misrepresented the package, as Mint reports.
During closing trial arguments, the lawyer for the aggrieved shareholders, Greg Varallo, claimed board members filled the proxy disclosures with half-truths when describing the package. The case on the largest-ever award compensation to a CEO is before the Delaware Chancery Court presided over by Judge Kathaleen St. J. McCormick.
As claimed by the suing shareholders, the inaccurate and conflicting documentation led investors to scavenge for information on the performance goals Musk was tasked to meet. The focal point of the lawsuit is the shareholders’ allegation that the board did not act independently when fixing Musk’s compensation plan.
Varallo also attacked Musk’s handling of Tesla, calling him a part-time CEO, especially after his Twitter acquisition.
A win for the plaintiff would require the board to develop a new compensation plan.
Musk testified in November that he had nothing to do with the payment package during the months-long trial. However, the trial might not end yet as the judge requested more briefing on Tuesday.
The lawyer for the board, Daniel Slifkin, argued the proxy disclosure on Musk’s compensation plan was accurate. Slifkin said the details left out were not material to the average shareholder. He also maintained that Delaware law did not require a perfect CEO compensation process.
