Elon Musk arrives at the Barron's Investment Conference at the Metropolitan Opera House on November 4, 2022 in New York. Attorneys pack a Delaware courtroom Monday, Nov. 14, 2022, as testimony begins in a shareholder lawsuit involving approval by Tesla's board of directors of a compensation plan potentially worth more than $55 billion for CEO Elon Musk was challenged.
Tesla CEO Elon Musk has received a compensation package that could be worth over Rs 4.4 lakh crore.
Over $55 billion (₹4.4 lakh crore) compensation package for CEO Elon Musk is being opposed by Tesla shareholders. In 2018, a performance-based stock option grant was reportedly negotiated by a compensation committee and approved by Tesla board members who had a conflict of interest due to their connections to Musk on a personal and professional level, according to the lawsuit. Testimony began on November 14 in a courtroom in Delaware.
Elon Musk, who owned about 22% of Tesla when the plan was approved, will receive stock worth 1% of the market value of the shares at the time of the grant for every 12 milestones. If the firm's market capitalization rises to $600 billion, Musk's ownership stake would increase to about 28%.
According to the compensation package, for each milestone, aggressive revenue and pretax profit growth targets must be met, as well as increase Tesla's market capitalization to $50 billion. Only if Tesla achieved a market capitalization of $650 billion and achieved unheard-of revenue and earnings within a decade would Musk be entitled to the full benefits of the $55.8 billion pay plan.
According to the lawsuit, Tesla has so far met all 12 market capitalization targets and 11 operational milestones, which has led to the vesting of 11 of the 12 tranches of the grant and to Musk's benefit of approximately $52.4 billion in stock option benefits. Has happened. Since the grant, Tesla's market value has grown from $53 billion to more than $690 billion, briefly approaching $1 trillion earlier this year.
According to the lawsuit, a false and incomplete proxy statement was used to support a shareholder vote to approve that compensation.
Like all manufacturers, Tesla's stock has taken a beating in 2022 as a result of a combination of closed supply lines and rising prices. Tesla stock is down 46% so far in 2022. The stock prices of Ford and GM have decreased by about 31% each.
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