Elon Musk defends $55B compensation package in court
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Tesla (NASDAQ:TSLA) CEO Elon Musk rejected claims that his hefty pay package was unduly approved during trial proceedings in a Delaware courtroom on Wednesday.
The âtechno-kingâ of Tesla (TSLA) is facing a shareholder lawsuit that alleges the performance-based stock option grant approved in 2018 that amounts to over $55B was offered and approved by a compensation committee and board that were unduly influenced by Musk and allowed him to become a highly paid part-time CEO. In particular, it accuses members of the board of having conflicts of interest and alleges the shareholder vote to rubber stamp the payment plan was based upon a proxy statement that misstated the difficulty of the milestone that triggered the payout and obscured the aforementioned conflicts of interest.
The massive pay package approved in January 2018 started at $0 and only increased based upon certain market cap milestones for Tesla (TSLA) all the way up to a $650B valuation. At the time, The New York Times called the package perhaps âthe boldest pay plan in corporate history.â As the automaker eclipsed a $1T market cap at its 2021 peak, Musk was able to hit 11 of the 12 targets set out by the compensation plan.
In addition to rejecting claims that he influenced the structure of the package, Musk leveraged the company's performance to highlight his commitment to Tesla.
"I was entirely focused on the execution of the company," he testified.
Board chair Robyn Denholm backed up this view, telling the court that such a sizable pay package was necessary to keep Muskâs attention as he focuses on space travel in his role at SpaceX (SPACE), boring tunnels with the Boring Company, and now social media via Twitter (TWTR). Incentivizing performance was the best course of action to keep his attention, in her view.
âIt was about motivating him to achieve things that were bold and audacious and him putting his time and energy into that as opposed to his other interests,â Denholm testified.
Elsewhere, Musk suggested that he will soon âfind somebody else to run Twitter (TWTR) over timeâ as he seeks to reduce the time he spends focusing on the recently acquired platform. 
Read more on Morgan Stanleyâs view of the fading Twitter hangover for Tesla shares.