A Tesla Inc. shareholder, Richard Tornetta, filed a lawsuit in a Delaware court on Thursday against the compensation package that Elon Musk, CEO of the company, is likely to receive. The lawsuit alleges that “The new E. Musk compensation plan is so large it dwarfs the pay package of every other public company CEO.” Seeking class action status, the lawsuit was unsealed in the court in Chancery, DE, days after a request was made to other shareholders to strip Musk of his Chairman status. This was rejected by the shareholders, however.
Earlier in March, another lawsuit was filed against Musk, this time, with reference to the purchase of SolarCity, a renewable energy company, by Tesla. The lawsuit alleged that Musk used his influence over the Tesla board to effect the acquisition of SolarCity, a company that he was a large shareholder of. The sale took place in 2016, and is now proceeding to trial. The lawsuit filed by Tornetta will be the second that seeks to limit Musk’s ongoing participation in the running of Tesla, with what many see as a more heavy-handed management style that may not take all shareholder considerations and concerns into account.
Tesla responded to Tornetta’s lawsuit stating that it would take the necessary action to clarify the bases of the allegations that were raised, indicating that for the compensation package to be realized by Musk, the company itself would have to show a marked improvement in its ability to deliver to the market on time, and then, it would have to become one of the most valuable companies in the world.