by Juliette Michael
New York, United States (AP) – Billionaire Tesla tycoon Elon Musk plans to appear Wednesday as part of a trial on his $50 billion pay package as CEO of the electric car giant.
Musk will testify in the same Delaware court where he faced a lawsuit by Twitter to ensure he went through with his purchase of the social platform.
The $44 billion Twitter purchase has put Musk under a flood of scrutiny after he conducted mass layoffs, scared off advertisers and opened up the platform to fake accounts.
The unrelated Tesla case is based on a complaint from shareholder Richard Tornetta, who accused Musk and the company’s board of directors of failing to perform their duties when they approved the payment plan.
Tornita alleges that Musk dictated his terms to directors who were not sufficiently independent of their superstar CEO to veto a package worth about $51 billion at recent stock prices.
The Tesla shareholder accuses Musk of “undue enrichment” and demanded the abolition of the wage program that helped make the businessman the richest man in the world.
According to a legal filing, Musk earned the equivalent of $52.4 billion in Tesla stock options over four and a half years after achieving nearly all of the company’s goals.
When the plan was adopted, it had a total value of $56 billion.
The trial without a jury opened Monday with testimony from Ira Ehrenprice, chair of the compensation committee on Tesla’s board of directors, who said the goals set were “extraordinarily ambitious and challenging.”
Ehrenpress argued that the board wanted to spur Musk to focus on Tesla at a time when the company was still struggling to gain traction.
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The trial will continue through Friday and will be presided over by Judge Kathleen McCormick, the same judge who would have presided over the Twitter case.
There is no deadline for its decision, which can take months.
Jill Fish, a law professor at the University of Pennsylvania, told AFP it was “very unusual” for this type of case to be brought to trial.
“There are not all of these successful challenges to executive compensation (as) courts have typically treated this as a business decision,” she added.
But the court found in this case that Musk’s ownership of about 22% of Tesla and his role as CEO “could have undue influence” on the board and other shareholders, it noted.
Musk canceled his personal attendance Sunday at an event on the sidelines of the G20 summit in Bali to be in court.
When asked why he didn’t travel to the tropical Indonesian island, Twitter’s new boss joked that his “workload has increased a lot lately” after his takeover of the social media giant.