Musk Is to Take Stand in Court With a $56 Million Claim

Elon Musk, renowned for his abrasive testimony, should testify in a Delaware court on Wednesday to refute accusations that his $56B Tesla (NASDAQ: TSLA) Inc compensation package was dependent on the achievability of performance goals and influence the board of directors.

Richard Tornetta, a Tesla shareholder, filed a lawsuit against Musk and the board in 2018 to demonstrate that Musk exploited his influence over the board to impose conditions on the package, which did not need him to work at Tesla full-time.

Twitter and Recent Mismanagement

Musk is currently altering a disorganized overhaul of Twitter Inc. (NYSE: TWTR), the social media platform he was compelled to purchase for $44B in a separate legal battle before the same judge after attempting to back out of that deal. Musk’s testimony before Chancellor Kathaleen McCormick (NYSE: MKC) comes when he is having difficulty managing that overhaul.

The richest man in the world, Musk, said last week that he would stay at Twitter’s San Francisco headquarters 24 hours a day until they resolve the company’s issues. The court may revoke the 2018 package, which, according to Tornetta’s lawyer Greg Varallo, was $20B more than the state of Delaware’s yearly gross domestic product.

The legal team representing Musk and the Tesla directors, who are also defendants, has portrayed the compensation package as a set of lofty aims that succeeded in increasing Tesla’s stock value by a factor of ten, from around $50B to more than $600B. They have claimed that independent board members created the strategy with help from significant shareholders and advice from outside experts.

Musk’s testimony had a preview for the court on Monday and Tuesday through brief excerpts from his 2021 deposition in the case. In one video, Musk rejected the notion that the board ought to have talked about mandating that he spends more time with Tesla.