December 4, 2022

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Elon Musk in court over $56 billion reward for Tesla

Elon Musk in court over $56 billion reward for Tesla

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Elon Musk will have to appear in court on Monday for a $1 billion reward he may receive as CEO of car maker Tesla. That reward could be so high that Musk can fully recoup the $44 billion he recently invested in the Twitter acquisition.

source: telegraph

The issue goes back years, but according to experts it may become controversial. Musk got the promise of a package of stock options in 2018 if he can achieve certain goals with Tesla. Since then, Tesla’s stock price has risen more than tenfold and the company was briefly valued at more than $1,000 billion.

According to calculations, Musk can earn up to 56 billion dollars. The controversial package allows him to buy 1 percent of Tesla stock at a huge discount every time certain goals are reached.

Richard Torneta, a small investor in Tesla, found the bonus excessive and filed a lawsuit early in 2018. At the time, there was a lot of speculation right away that Tesla’s stock price could skyrocket to significant heights.

Tornetta, who is also a metal drummer and runs an audio equipment company, finds it unfair to give Musk a board bonus that would actually be completely under his control. One of the directors involved was Kimbal Musk, the brother of the world’s richest man.

In the interest of all shareholders

However, it is not so simple. Musk’s lawyers noted that the proposal was passed by a large majority of Tesla shareholders. Because of the bonus, Musk would have focused on making Tesla better. This is said to be the reason for the high share price, which is in the interest of all shareholders.

The case is being heard in Delaware by the same judge who recently handled the case between Twitter and Musk to force the latter to go ahead with the takeover plan. Musk made a bid on Twitter in April, but regretted it and decided in July that he wanted to walk away from the deal. Subsequently, he was still willing to buy Twitter.

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