- The final comments in a lawsuit over Elon Musk’s $56 billion Tesla pay package were made Tuesday.
- Musk has been criticized by some shareholders for a perception that he isn’t focused enough on Tesla.
- A lawyer in the suit said that Musk was a “part-time CEO,” the New York Times reported.
A lawyer for Tesla shareholders called Elon Musk a “part-time CEO,” who is too distracted by his work at Twitter and SpaceX to properly manage the electric vehicle company, according to a report from The New York Times.
On Tuesday, the Delaware court heard the final comments in a lawsuit over Musk’s Tesla compensation package, currently valued at $56 billion. A group of shareholders contested an options package, which gave Musk the right to acquire Tesla stock that was valued at over $70 billion before its share price fell last year, according to the Times.
Tesla investor Richard Tornetta, the “Dawn of Correction” heavy metal drummer, brought the case against Musk and Tesla last March, arguing that the compensation was “beyond the bounds of reasonable judgment.”
Musk was worth around $20 billion when the package was first announced in January 2018, per the Bloomberg Billionaires Index. The package, plus rising Tesla stock, catapulted him to becoming the world’s richest person three years later. As of Thursday, Bloomberg’s Billionaires Index ranks him as the world’s second richest person, with a net worth of $183 billion.
Musk’s lawyers argued that the compensation was justified because “Musk is not the typical CEO” and he was “instrumental in transforming Tesla from a high-end electric sports car manufacturer to far more than just a car company.”
But now the Times reports the plaintiffs are accusing Musk of focusing too much on his other companies to properly devote himself to managing Tesla. Soon after purchasing Twitter for $44 billion last October, Musk said he would be sleeping at the company’s headquarters “until the org is fixed,” for example.
Musk was also criticized for bringing in more than 50 Tesla workers to review code at Twitter in the early days of his takeover. These employees were reportedly working 12-hour shifts, seven days a week.
While testifying in the lawsuit last November, Musk defended his decision to bring in these engineers, saying that they only worked at Twitter for a few days and did the work after-hours.
Several Tesla shareholders have openly criticized Musk since he took over, echoing the accusation that he’s not spending enough time at the electric-vehicle company. The third-largest individual investor, KoGuan Leo, said: “Elon abandoned Tesla and Tesla has no working CEO.”
And with Tesla’s stock price down nearly 35% over the last six months per Markets Insider, investors in a Twitter Space pleaded for Musk to leave Twitter, saying: “What we’re getting is a vote of no confidence in Elon.”
Tesla did not immediately respond to Insider’s request for comment.