Elon Musk dragged himself out of the Twitter turmoil for a few hours on Wednesday to defend in court the huge compensation plan Tesla gave him in 2018, saying the electric vehicle maker’s success at the time was far from assured. .
As factory output struggled to increase, “my time was almost entirely devoted to Tesla,” he said during his hearing in a Delaware courtroom. “The probability of survival (of the group) was extremely low”, also recalled the multi-entrepreneur who has repeatedly said that Tesla was very close to bankruptcy in 2018.
He is being sued, along with Tesla and some members of the board of directors, by a shareholder who accuses them of having improperly authorized in 2018 “the largest compensation plan ever awarded to an executive”.
His entry was made discreetly: a black Tesla parked at the back of the enclosure, directly in a tent set up for the occasion.
Dressed in a black suit and tie, he answered questions for about two and a half hours in the witness box before leaving without answering questions from a journalist.
He was due to speak in this very room during a lawsuit opposing him to Twitter, before deciding to honor his commitment and pay $44 billion to buy the social network at the end of October.
Since then it has been under intense pressure, between the dismissal of more than half of the employees, the flight of advertisers, warnings from several authorities and the confusing launch of new products.
After the frenzy of the beginning, “I think I’ll reduce the time I spend on Twitter and find someone else to lead” the company, underlined Elon Musk. A “fundamental restructuring of the organization” is “likely” to be completed this week, he added.
The compensation plan in question on Wednesday calls for paying Elon Musk Tesla stock based on meeting various 10-year targets. It was estimated when it was adopted at $56 billion. Enough to fuel his fortune and help him rise to the rank of richest man in the world.
According to the plaintiff, Richard Tornetta, Elon Musk dictated his terms to directors who, due to their relationship with the iconic businessman or their personal interests, were not independent enough to oppose. And that’s when he wasn’t even working full-time for Tesla, as he’s also at the helm of space company SpaceX and start-ups Neuralink and The Boring Company.
Richard Tornetta, who also believes Tesla shareholders did not have all the relevant information when they approved the plan, calls for its cancellation.
Defendants argued that the compensation plan was tied to the company’s performance and worked perfectly as Tesla’s value has increased more than tenfold since its adoption.
Before Tesla’s Model 3 started gaining market share, other automotive players “thought electric vehicles were a joke,” said Elon Musk. As for Tesla’s investors, they are “among the most experienced in the world,” he said.
He said he was not involved in developing the plan, although court documents suggest he discussed it with board members and executives.
The plaintiff’s lawyer asked him about his multiple projects, from the flamethrowers marketed by Boring, to the perfume he recently launched, to his peace proposal for Ukraine and his debut at the head of Twitter.
He also mentioned his nicknames, “Technoking” at Tesla and “Chief Twit” on Twitter (“twit” means “idiot” in English). “Humor is cool,” replied the whimsical businessman.
The trial, without a jury, began on Monday. Several current and former board members testified, including Ira Ehrenpreis on Monday, Robyn Denholm on Tuesday and Antonio Gracias on Wednesday. James Murdoch, son of media mogul Ruport Murdoch, is also expected to speak.
The judge in charge of the case, Kathaleen McCormick, also handled Elon Musk’s opposition to Twitter. Her decision is expected in a few weeks or months.