Tesla is being sued by plaintiff Richard J. Tornetta, who says that the company was wrong in awarding Musk his compensation package in 2018, which shareholders approved at the time. Tesla said at the time it could be worth nearly $56 billion, and the net value today is $50.9 billion.
Musk took the stand in the Delaware Court of Chancery in Wilmington shortly after 9 a.m. Musk’s testimony came just as he is asserting his control over Twitter, overnight giving an employees an ultimatum to become “extremely hardcore,” involving “working long hours at high intensity,” or leave the company.
Musk began the day under questioning from his defense attorney and an attorney for the plaintiff, where they asked him about Tesla’s governance and his time spent at the company, as well as his relationship with the board, which is supposed to be independent from Musk and represent shareholders. Musk acknowledged his friendship with board members, including some shared family vacations. Under questioning, Musk defended himself, saying he upheld his duty to increase Tesla’s market value, but conceded that he at times does not seek board approval for public statements.
The lawsuit alleges that Musk’s huge pay package was unjust enrichment, and alleges the board failed to meet its legal duty to act in the best interest of Tesla shareholders. The suit describes Musk as a “part-time CEO,” as he leads other ventures. One of the points of contention in the case is whether or not Tesla’s board is truly independent from Musk and represents shareholders, or if he had undue influence on the board to award him such a massive payday.
Musk himself controls more than 20% of all outstanding Tesla shares, including unexercised options.
Musk initially denied Thursday that he essentially negotiated against himself regarding how many shares he would receive in the pay package. (To negotiate against oneself would essentially give Musk total control over the outcome, and raise big questions about the board and if it met its fiduciary responsibilities.)
But the plaintiff’s attorney Gregory Varallo then replayed some of Musk’s deposition in which he said at one point regarding the pay package, “that was I guess me negotiating against myself.”
Musk then acknowledged saying this. It was one of several occasions where Varallo appeared to highlight inconsistencies in Musk’s statements, current and former.
Fewer than three minutes into questioning, Musk said that he believed that there had been consultation with the board of directors before his title changed to “Technoking.”
Varallo then played back Musk’s deposition in which Musk said that he hadn’t consulted with the board over the title change.
Musk also had said in his deposition, which was replayed in court Wednesday, that he was the person that came up with the vision for Tesla.
But in court Wednesday Musk struck a di