The trial will pit Musk against one of the electric carmaker’s smallest investors, Richard Tornetta, who held just nine shares when he sued in 2018.
According to Tornetta’s claim, Musk ordered the board of directors to approve the remuneration package before putting it to a vote among shareholders who had been misinformed about the difficulty of achieving specific goals.
The compensation plan, which was based on corporate performance goals, was unfair because the goals were excessively low, allowing Musk to collect billions despite only working a “part-time executive,” according to the lawsuit.
According to Reuters, the pay package was heavily criticised, and CalSTRS, the state of California’s teachers retirement system, was one of the investors that voted against it.
In court documents, Musk and the directors claim that the package helped Musk stay focused on Tesla during a trying time and caused the stock price to increase by ten times.
If the lawsuit is successful, Musk will lose his $56 billion salary from stock grants, which will instead benefit Tesla and not Tornetta.
