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Tesla Shareholders Challenge Elon Musk $56 Billion Pay Package

Tesla CEO Elon Musk is on trial after shareholders challenged the $56 billion pay package that he is entitled to for meeting certain targets. The quarrel, as The Verge reports it, has to do with the allegations that the targets were ‘easy’.

Given Musk record of avoiding trial, it is not clear if he would take the stand to defend his payout or renegotiate. As we saw in his Twitter battle, he did all he could to get out of the $44 billion acquisition except actually stand trial.

The 12 targets that Tesla was to meet under its CEO’s leadership included it reaching a market valuation of $650 billion in a 10-year period. At the time when the shareholders signed off on the agreement, the car company was worth only $59 billion. However, just under three years, Tesla hit a market cap of $1 trillion.

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By the first quarter of 2022, Musk had already met 11 of the targets and the final one is said to be all but in the bag ahead of the first quarter of 2023. If he meets this target, he will be looking to collect the final $56 billion payment from Tesla.

Meanwhile, the shareholders will be looking to poke holes in the agreement given that the billionaire has been splitting his time at Tesla working at SpaceX, The Boring Company, Neuralink, and now, Twitter. Although, it was not clear if work hours were part of the conditions attached to the compensation.

There is also the fact that the board that agreed to Musk’s deal included his brother and two of his friends, with the shareholders arguing that it had not been an independent decision.

Note that since hitting the trillion-dollar valuation in 2021, the electric car maker has since its market cap slump in 2022 and was worth about $600 billion when this article was published.

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Onwuasoanya Obinna

A reader of books and stringer of words. Passionate about Science and Tech. When not writing or reading he is surfing the web and Tweeting.