A new trial for “Elon Musk” .. Will you extract 55 billion dollars from him?

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A new trial for Elon Musk

On Tuesday, lawyers representing a Tesla shareholder asked the Delaware court to nullify Elon Musk‘s colossal 2018 bonus package — worth more than $55 billion. dollar — that was granted by the company’s board of directors. The court is now carefully examining this payout for its legitimacy.

The most recent dispute has arisen in the aftermath of a trial that took place last November, wherein Musk adamantly asserted he had nothing to do with deciding on or discussing the package at any meetings held by the board members, compensation committee and working groups who helped draw up its contents; this is according to “Fox News” who were able to obtain this information.

Legal representatives of the shareholders have called for an end to Musk’s compensation package as it was created through unfair negotiations with directors whom he had influence over.

The lawyers asserted that, due to the obfuscatory statements and incomplete disclosures given by management, shareholders had approved it.

Attorney Greg Varallo argued that the Tesla defendants must demonstrate beyond doubt that their bonus plan is “equitable” to shareholders, owing to Musk’s controlling shareholder status. Farallo suggested counsel Kathleen St. Jude McCormick force Musk to surrender a portion of his stock option grants as reparation for any inequity caused by the bonus plan.

Judge McCormick wouldn’t let Elon Musk get away with breaking his agreement to purchase Twitter, and thus he was compelled to acquire the social media platform for a hefty cost of $44 billion.

In response, the defense’s lawyers argued that the bonus plan was agreed upon by a compensation committee whose members were uninvolved, with performance targets so difficult that some of Wall Street’s investors scoffed at them. Moreover, this agreement was validated through a shareholder vote which wasn’t even needed according to Delaware law.

With the plan in place, Musk’s stake in Tesla rose significantly – starting at 22% of shares outstanding and eventually reaching 28%. This was if the company saw a growth of $600 billion in market value. In addition to this, he received stocks representing 1% of all current shares.

Over the subsequent years, Tesla had accomplished all of its bonus requirements for twelve corporate market value criteria and eleven operating conditions. As a result, Musk became eligible to receive stock options worth almost $28 billion based on a post-trial brief presented by plaintiff’s lawyers.

Evan Chesler, a defense attorney, noted that the compensation package was a “high-risk and high reward” arrangement that not only worked out for Musk but additionally brought many advantages to Tesla’s shareholders. The company experienced an 11-fold leap in its value from $53 billion to an astonishingly large sum of over $600 billion–which even further skyrocketed into becoming one trillion dollars last year!