Wilmington Trial: Is Elon Musk Actually Selling Mars?
TL;DR: A billionaire’s $56 billion Tesla pay deal is under fire because a shareholder thinks Elon used his board clout to chase the red planet. The courtroom drama is turning into a full‑blown Space‑X‑style spectacle.
The Back‑Stabbing Stakes
- On Nov. 14, a showdown started in the Delaware chancery. A Tesla director and a former exec took the gavel, defending Elon Musk’s colossal pay package.
- Shareholder Richard Tornetta says Musk hijacked the board to hand himself a multimillion‑dollar prize, then convinced investors to swallow the deal like a sponsorship pitch.
- He’s asking the court to slash that $56 billion haul to nothing and says the package was “as big as Delaware’s entire GDP.”
Board Misery and the “No Clock In” Policy
Ira Ehrenpreis, who earned his seat on the board in 2007, gave his spiel about why the board never demanded Musk work 9‑to‑5. “We never had that type of relationship with Elon — he’s not an accountant, he’s a rocket‑ship chief,” he told the jury.
During a surprise video from Musk’s 2021 deposition, the question rolled around: “Did the board want him to be on the clock at Tesla?” Musk shrugged and said, “No, that would be silly.”
“The focus was on results, not hours,” Ehrenpreis echoed — a sweet reminder that Musk’s brain is wired more to goals than to timetables.
Space‑X Money and an S‑Shape Response
Ex‑Tesla counsel Todd Maron was called to testify about a brief email from Musk that stuttered (kind of) “money toward Mars if I am successful.” Maron shrugged, “I thought it was pretty irrelevant.”
In the same breath, the case included Musk’s high‑profile Twitter purchase. The former Twitter owner tweeted last nights in San Francisco’s HQ, “Will be working & sleeping here until the org is fixed.”
What the Court Has to Decide
Chancellor Kathaleen McCormick, already juggling the Twitter‑Musk dispute, will rule on whether the giant pay package really deserved its wings. So far Tesla’s leadership and a handful of directors (like Robyn Denholm and former CFO Deepak Ahuja) are staying inside the circle.
All hell is about to break, and it’s not just about the money; it’s about who gets to decide which planet a billionaire wants to conquer next. Will the court put Elon in the “Mars Club” or just keep him booting up cars on Earth? Only the legal crew will know. Get ready for a spectacle of all‑star witnesses, corporate drama, and a side‑story about a man who’s literally looking to hit six‑term congresses of celestial ambition.
Wide latitude to set pay
Musk’s Pay Perks Make Legalists Smile – A Tale of Money, Power, and Delaware Law
When Elon Musk’s epic pay package came under scrutiny, legal experts swore that he’s in a golden corner of the courtroom—better than the chaos that tripped the Twitter takeover. In short, boards have the freedom toolkit to hand out executive pay, but if the cash flows to a controlling shareholder, the hoops rise a notch.
The Boardroom
- Board Latitude: Directors can set compensation with broad leeway.
- Extra Scrutiny for Controlling Owners: A more rigorous test kicks in when pay touches the board’s top dog.
- The Suspicious Test: The court will sniff out whether Musk truly qualifies as a “controlling shareholder.”
Back in 2018, Musk held 21.9% of Tesla’s stock. That staked his claim to both ownership and command, and some plaintiffs point to his “domineering personality” and close ties with the board as if it’s a movie plot.
“There has never been a case where a 21.9% shareholder who also runs the show received a payout plan of this scale,” notes Lawrence Cunningham, a corporate law professor at George Washington University.
Past Battles: Disney Meets Delaware Law
Let’s rewind to a Disney parody of “the fight over pay.” In 1997 a shareholder sued the two‑year‑old former president Michael Ovitz for a gaping $130 million severance. The shareholder lost in 2005, and the Delaware Supreme Court nailed the decision down in 2006.
Unlike Disney, Tesla didn’t have an underperforming exec—it’s been the rocket ship of success under Musk’s helm. Still, the legal saga taps Delaware’s permissive stance on board pay.
What’s In the Tesla Package?
- Micro‑Buy‑backs: Musk can snag 1% of Tesla stock at a lip‑shocking discount whenever he hits performance targets. Failing that… zero returns.
- Massive Pay‑Off: Tesla’s targets? 12. Musk’s performance? 11 out of 12 accomplished, catapulting the company’s valuation from a modest $50 billion to a whopping $1 trillion (for a fleeting moment).
- Trial Time: The docket will be busy for ~3 months, with a possible appeal to the Delaware Supreme Court.
So, the verdict’s still on the horizon—will the judges agree that Musk’s wealth is a winner’s reward or a board’s debt to a controlling share?
Bottom Line
Musk’s pay drama is a legal mash‑up of executive freedom, shareholding power, and Delaware’s heroic boardroom traditions. A verdict is likely in a few months; meanwhile, all eyes stay on the deck as this high‑stakes chess game unfolds.
