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The
arguments follow a five-day trial in November that featured
testimony from the Tesla chief executive about the origins of
the 2018 pay package and whether its performance goals were
difficult to achieve and accurately described to investors.
Richard Tornetta, a small Tesla investor, sued Musk and the
board in 2018 and hopes to prove Musk coerced compliant
directors into providing a package of his design, which is many
times larger than the combined pay of the next 200 highest-paid
CEOs. It contributes to Musk's fortune, the world's second
largest.
The package allows Musk to buy 1% of Tesla's stock at a deep
discount each time escalating performance and financial targets
are met, otherwise Musk gets nothing.
Tesla has hit 11 of the 12 targets as its value ballooned to
briefly top $1 trillion in 2021 from $50 billion when the
package was negotiated.
Tornetta's lawyers argued the Tesla board had a duty to offer a
smaller pay package or look for another CEO and they should have
required Musk to work full-time at Tesla instead of allowing him
to focus on other projects, like running Twitter.
Tornetta wants some or all of the package to be rescinded.
Musk, who founded rocket company SpaceX, admitted during his
testimony that his pay package provided funds he would use to
finance interplanetary travel.
"It's a way to get humanity to Mars," he testified. "So Tesla
can assist in potentially achieving that."
His lawyers also argued the pay plan benefited shareholders by
increasing the value of their stock 10 times.
Chancellor Kathaleen McCormick of Delaware's Court of Chancery
must determine if the Musk, who owned 22% of Tesla stock in
2018, controlled the company through board ties and his
personality, which will shape the outcome of the case.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by David
Gregorio)
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