Elon Musk, the CEO of Tesla, will testify in court on Wednesday as part of a trial over his $50 billion (R865 billion) pay package as CEO of the electric car giant.
Musk will testify in the same Delaware court where he was sued by Twitter to ensure he completed his buyout of the social platform.
Musk has come under fire for his $44 billion purchase of Twitter, following massive layoffs, scaring advertisers, and opening the platform to fake accounts.
The unrelated Tesla case stems from a shareholder complaint in which Tornetta accused Musk and the company’s board of directors of failing in their duties when they approved the pay plan.
Tornetta claims Musk dictated his terms to directors who were not sufficiently independent of their star CEO to object to a package worth approximately $51 billion at current share prices.
The Tesla shareholder accuses Musk of “unjustified enrichment” and requests the cancellation of a pay programme that helped make the entrepreneur the world’s richest man.
According to a legal filing, Musk received the equivalent of $52.4 billion in Tesla stock options over the course of four and a half years, after nearly all of the company’s targets were met.
When the plan was approved, it was worth a total of $56 billion.
The non-jury trial began Monday with testimony from Ira Ehrenpreis, chair of Tesla’s compensation committee, who stated that the targets set were “extraordinarily ambitious and difficult.”
Ehrenpreis contended that the board wanted Musk to concentrate on Tesla at a time when the company was still struggling to gain traction.
The trial will last until Friday and will be presided over by Judge Kathaleen McCormick, who will also preside over the Twitter case.
Her decision, which could take months, has no deadline.
According to Jill Fisch, a law professor at the University of Pennsylvania, bringing this type of case to trial is “highly unusual.”
“There aren’t all that many successful challenges to executive compensation (as) the courts have typically treated this as a business decision,” she added.
However, the court determined in this case that Musk’s ownership of approximately 22% of Tesla and his role as CEO “could have an undue impact” on the board and other shareholders.
Musk cancelled an appearance on the sidelines of the G20 in Bali on Sunday to attend court.
When asked why he hadn’t visited the tropical Indonesian island, the new Twitter CEO joked that his “workload has recently increased quite a lot” since taking over the social media behemoth.
