Tornetta v. Musk, et al.

Last updated

Tornetta v. Musk, et al. is a case involving an objection to a pay for performance contract that Tesla, Inc. shareholders had approved in exchange for Elon Musk agreeing to waive a salary. The case was presided over by Delaware Chancellor Judge Kathaleen McCormick. It was submitted on April 25, 2023, and a ruling was issued in favor of the plaintiff on January 30, 2024. [1] In June 2024, Tesla stockholders voted for the pay package a second time. [2] Judge McCormick ruled against the pay package a second time on December 3, 2024. [3] Writing for Bloomberg Law on December 5, 2024, legal expert Anat Alon-Beck said the case was "a landmark in corporate governance." [4]

NPR reported, "The compensation package was set up as a series of 12 milestones, each unlocking more compensation as Tesla continued to grow. Under the plan, Musk wouldn't earn a salary, but would instead receive additional Tesla shares the more the company grew." [5]

Even though the $56 billion pay package had been approved by shareholders, Judge McCormick cited the amount as being "incredible" and "an unfathomable sum" when she made her first ruling in January 2024. [6] By the time Judge McCormick made her second ruling in December 2024, the pay package had increased to $101 billion based on Tesla’s closing share price. [7]

On December 2, 2024, Musk tweeted, "Shareholders should control company votes, not judges." [8] [9]

Related Research Articles

<span class="mw-page-title-main">Elon Musk</span> South African-born businessman (born 1971)

Elon Reeve Musk is a businessman known for his key roles in the space company SpaceX and the automotive company Tesla, Inc. His other involvements include ownership of X Corp., the company that operates the social media platform X, and his role in the founding of the Boring Company, xAI, Neuralink, and OpenAI. Musk is the wealthiest individual in the world; as of December 2024, Forbes estimates his net worth to be US$432 billion.

<span class="mw-page-title-main">Tesla, Inc.</span> American electric vehicle and clean energy company

Tesla, Inc. is an American multinational automotive and clean energy company. Headquartered in Austin, Texas, it designs, manufactures and sells battery electric vehicles (BEVs), stationary battery energy storage devices from home to grid-scale, solar panels and solar shingles, and related products and services.

<span class="mw-page-title-main">Gary Gensler</span> American banker (born 1957)

Gary S. Gensler is an American government official and former investment banker serving as the chair of the U.S. Securities and Exchange Commission (SEC). Gensler previously worked for Goldman Sachs and has led the Biden–Harris transition's Federal Reserve, Banking, and Securities Regulators agency review team. Prior to his appointment, he was professor of Practice of Global Economics and Management at the MIT Sloan School of Management.

<span class="mw-page-title-main">SolarCity</span> American solar energy company

SolarCity Corporation was a publicly traded company headquartered in Fremont, California, that sold and installed solar energy generation systems as well as other related products and services to residential, commercial, and industrial customers. The company was founded on July 4, 2006, by Peter and Lyndon Rive, the cousins of SpaceX and Tesla CEO Elon Musk. Tesla acquired SolarCity in 2016, at a cost of approximately US$2.6 billion and reorganized its solar business into Tesla Energy.

<span class="mw-page-title-main">Gigafactory Nevada</span> Tesla, Inc. factory

Gigafactory Nevada is a lithium-ion battery and electric vehicle component factory in Storey County, Nevada, United States. The facility, located east of Reno, is owned and operated by Tesla, Inc. The factory supplies battery packs and drivetrain components for the company's electric vehicles, produces the Tesla Powerwall home energy storage device, and assembles the Tesla Semi. It is the largest and the first Tesla Gigafactory in the world. If fully built out, the building will have the largest footprint in the world.

Robbins Geller Rudman & Dowd LLP is an American law firm headquartered in San Diego, California. It is a plaintiffs law firm specializing in securities litigation and shareholder rights cases.

<span class="mw-page-title-main">Tesla Energy</span> American solar energy generation and battery energy storage company

Tesla Energy Operations, Inc. is the clean energy division of Tesla, Incorporated that develops, manufactures, sells and installs photovoltaic solar energy generation systems, battery energy storage products and other related products and services to residential, commercial and industrial customers.

Tesla, Inc., an electric vehicle manufacturer and clean energy company founded in San Carlos, California in 2003 by American entrepreneurs Martin Eberhard and Marc Tarpenning. The company is named after Serbian-American inventor Nikola Tesla. Tesla is the world's leading electric vehicle manufacturer, and, as of the end of 2021, Tesla's cumulative global vehicle sales totaled 2.3 million units.

<span class="mw-page-title-main">Tesla Roadster (second generation)</span> Upcoming electric sports car from Tesla

The Tesla Roadster is an upcoming battery electric four-seater sports car to be built by Tesla, Inc. The company said it will be capable of accelerating from 0 to 60 mph in 1.9 seconds, which would be quicker than any street legal production car to date at its announcement in November 2017. The Roadster is the successor to Tesla's first production car, the 2008 Roadster.

<span class="mw-page-title-main">Kathaleen McCormick</span> American lawyer and judge (born 1979)

Kathaleen Saint Jude McCormick is an American lawyer and judge on the Delaware Court of Chancery, first as a vice chancellor from 2018 to 2021 and then as the current chancellor since 2021. She is the first female chancellor in Delaware history.

<span class="mw-page-title-main">TSLAQ</span> Group of people who criticize Tesla, Inc.

TSLAQ is a loose, international collective of largely anonymous short-sellers, skeptics, and researchers who openly criticize Tesla, Inc. and its CEO Elon Musk. The group primarily organizes on social media, often using the $TSLAQ cashtag, and on Reddit to coordinate efforts and share news, opinions, and analysis about the company and its stock. Edward Niedermeyer, in his book Ludicrous: The Unvarnished Story of Tesla Motors (2019), pinpoints the July 2018 doxxing of Twitter user Lawrence Fossi, a Seeking Alpha writer and Tesla short seller operating under the pseudonym Montana Skeptic, as the catalyst for the formation of TSLAQ.

<span class="mw-page-title-main">Criticism of Tesla, Inc.</span> Systemic criticism of Tesla, Inc. and its products and leadership

Tesla, Inc. has been criticized for its cars, workplace culture, business practices, and occupational safety. Many of the criticisms are also directed toward Elon Musk, the company's CEO and Product Architect. Critics have also accused Tesla of deceptive marketing, unfulfilled promises, and fraud. The company is currently facing criminal and civil investigations into its self-driving claims. Critics have highlighted Tesla's downplaying of issues, and Tesla's alleged retaliation against several whistleblowers.

<span class="mw-page-title-main">Optimus (robot)</span> Humanoid robot being developed by Tesla

Optimus, also known as Tesla Bot, is a general-purpose robotic humanoid under development by Tesla, Inc. It was announced at the company's Artificial Intelligence (AI) Day event on August 19, 2021, and a prototype was shown in 2022. CEO Elon Musk stated in 2022 that he thinks Optimus "has the potential to be more significant than [Tesla's] vehicle business over time." Media and expert opinions based on corporate showcases have been mixed.

<span class="mw-page-title-main">Tesla and unions</span> Labor relations of the American car company

Tesla, Inc. is an American electric car manufacturer which employs over 140,000 workers across its global operations as of January 2024, almost none of which are unionized. Tesla CEO Elon Musk has commented negatively on trade unions in relation to Tesla. Despite allegations of high injury rates, long hours, and below-industry pay, efforts to unionize the workforce have been largely unsuccessful. There are active labor disputes with Tesla in the United States, Germany and Sweden.

Leo Koguan is an Indonesian-born Chinese American businessman, investor, and philanthropist. He is the chairman and co-founder of SHI International Corp and was the third-largest individual shareholder in Tesla, Inc.

The business magnate Elon Musk initiated an acquisition of American social media company Twitter, Inc. on April 14, 2022, and concluded it on October 27, 2022. Musk had begun buying shares of the company in January 2022, becoming its largest shareholder by April with a 9.1 percent ownership stake. Twitter invited Musk to join its board of directors, an offer he initially accepted before declining. On April 14, Musk made an unsolicited offer to purchase the company, to which Twitter's board responded with a "poison pill" strategy to resist a hostile takeover before unanimously accepting Musk's buyout offer of $44 billion on April 25. Musk stated that he planned to introduce new features to the platform, make its algorithms open-source, combat spambot accounts, and promote free speech, framing the acquisition as the cornerstone of X, an "everything app".

<span class="mw-page-title-main">Wealth of Elon Musk</span> Overview of the wealth of Elon Musk

Elon Musk is the wealthiest person in the world, with an estimated net worth of US$442 billion as of December 2024, according to the Bloomberg Billionaires Index, and $439.4 billion according to Forbes, primarily from his ownership stakes in Tesla, Inc. and SpaceX. In November 2021, he became the first person in the world to have a net worth above $300 billion, and in December 2024, he became the first person to reach a net worth of $400 billion.

The personal and business legal affairs of Elon Musk encompass the legal cases involving businessman Elon Musk as the plaintiff, defendant, or concerning his companies.

Joseph R. Slights III is a lawyer and retired American judge who served on the Delaware Court of Chancery from 2016 to 2022, and the Superior Court of Delaware from 2000 to 2012, playing an instrumental role in creating that court's Complex Commercial Litigation Division.

References

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.