(Reuters) – Elon Musk’s $ 44 billion takeover of Twitter helps provide ammunition for an upcoming trial in which an investor will claim that the CEO’s $ 56 billion salary package from Tesla Inc is a waste of money that failed to secure his full-time jobs .
The deal for Twitter Inc. and its potential to distract Musk from Tesla will play an important part in the lawsuit in October, according to one of the shareholder’s lawyers.
The lawsuit claims that Musk created the 10-year package and Tesla’s board stamped it rubber-stamped in 2018 without requiring the celebrity CEO to devote himself to the electric car manufacturer.
“Look at most CEO contracts. The first line says, ̵6;You will be a full-time CEO and devote essentially full-time time to the company’s operations and affairs.’ the goal against the wage agreement.
Musk and Tesla did not respond to requests for comment. In court papers, the defendants said that the plan was properly prepared by independent board members, approved by shareholders and has generated unmatched profits for investors.
Tesla’s share has fallen more than 20% since Musk revealed that he had taken a 9% stake in Twitter on April 4, partly due to concerns that he was distracted by the electric car manufacturer’s problems with the supply chain.
Tesla’s salary package for 2018 provides stock options when the company meets escalating financial targets, which the company said would stimulate his continued leadership. If Tesla met all the targets, which are described as “stretch” targets, the plan would be worth at least $ 56 billion, even if the value of the plan increases as Tesla’s share rises.
The trial is set to begin Oct. 24 in Wilmington, Delaware and last for five days.