Elon Musk says he will find a new leader for Twitter

An image of Elon Musk is seen on a smartphone placed on printed Twitter logos in this picture illustration taken April 28, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

WILMINGTON, Del, Nov 16 (Reuters) – Elon Musk said in court on Wednesday that he made some decisions about Tesla Inc (TSLA.O) without the approval of the company’s directors as he defended his $56 billion salary package. against the statements he had dictated. conditions him to obedient advice.

Tesla shareholder Richard Tornetta sued Musk and the board in 2018 and hopes to prove that Musk used his dominance on the Tesla board to get a giant compensation package that didn’t require him to work at full time at the electric car company.

When questioned by Tornetta’s attorney, Greg Varallo, Musk dismissed claims that his salary package goals were easy to achieve.

“There are no words to express the amount of pain,” Musk said in an almost whisper, describing the effort it took to take the company from the brink of bankruptcy in 2017 to explosive growth. “It’s a pain I wouldn’t want to inflict on anyone.”

Varallo has repeatedly tried to portray Tesla as a company controlled by Musk, the richest person in the world, and has tried to prove that Musk has evaded the Tesla board of directors on several occasions.

For example, Musk said he made a one-sided call to end Tesla’s acceptance of the cryptocurrency Bitcoin and acknowledged that the board had not been notified before telling analysts in October that Tesla’s board was considering a return to buy up to $10 billion of stock.

But the testimony did not conclusively prove who developed Musk’s 2018 compensation package or establish whether it was the product of his own lawsuits rather than negotiations with the board.

The five-day trial comes as Musk struggles to oversee a chaotic overhaul of Twitter Inc, which he was forced to buy for $44 billion in a separate legal battle before the same judge, Chancellor Kathaleen McCormick, after trying to make back off on that deal. . . Musk tweeted this week that he would be staying at Twitter’s San Francisco headquarters 24 hours a day until it sorted out the company’s problems, saying Wednesday that he arrived in Delaware on an overnight flight from the social network.

Musk said his focus on restructuring Twitter would soon fade and he would find someone else to lead it. He rejected the argument that his payment arrangement should have required him to spend a specific number of hours at Tesla.

“I basically work all the time,” he said. “I don’t know what a stamped watch would do.”

Though Musk has a history of combative testimony, calling lawyers “reprehensible” or “a bad human being,” he was relatively subdued in Wednesday’s proceedings, although he did at times express frustration with Tornetta’s attorney.

At one point, Musk told plaintiff’s attorney, “Your question is a complex question that is commonly used to mislead people.”

Musk acknowledged that he’s not a lawyer, but added that “when you’re involved in enough lawsuits you learn a few things.”

Tornetta asked the court to reverse the 2018 package, which her attorney said was $20 billion more than the annual gross domestic product of the state of Delaware.

Musk’s legal team and Tesla directors presented the compensation package as a series of bold goals that worked by resulting in a 10-fold growth in the value of Tesla’s stock, to more than $600 billion from around $50 billion. They argued that the plan was developed by independent board members, advised by outside professionals and with input from large shareholders.

Tornetta’s lawyer tried to prove that Musk was involved from the start. A May 2017 email appeared to establish that Musk was pushing the payment plan months before the board negotiated it with him.

“I’m planning something really crazy, but also high stakes,” he wrote. Antonio Gracias, a venture capital investor and longtime friend of Musk who also served on the Tesla board of directors from 2007 to 2021, took the stand after Musk testified.

Gracias said he is ready to push Musk back if necessary. “I don’t mince words with any of my CEOs,” he told the court.

The controversial Tesla package allows Musk to buy 1% of Tesla’s shares at a steep discount whenever increasing financial and performance goals are met. Otherwise, Musk gets nothing.

Tesla hit 11 of 12 targets, according to court documents. Shareholders generally cannot challenge executive pay because the courts often give in to the judgment of directors. Musk’s case survived a motion to dismiss because it was ruled that he could be considered a majority shareholder, meaning stricter rules apply. Gracias described Musk as essential to the company’s success in his testimonial, calling him “extraordinary” and a “product genius.”


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