Elon Musk and Tesla board of directors sued for overcompensation

Tesla CEO Elon Musk and the company’s board of directors received a new lawsuit after a pension fund argued that the executives awarded themselves giant compensation packages at the automaker’s expense.

The pension fund, which represents Detroit’s police and fire departments, is an investor in Tesla and argues that the automaker’s board of directors channeled hundreds of millions of dollars to generate high payments in compensation packages, according to a report. by Bloomberg published on Thursday June 18.

“They have awarded themselves millions in overcompensation and are prepared to maintain their relentless greed for the indefinite future,” says part of the lawsuit. Tesla has not yet responded to a request for comment from CNET.

The lawsuit goes on to say that the very inappropriate compensation began in 2017, and in 2018, two Tesla board members not working for the automaker received stock grants worth more than $ 8.7 million that year alone. The lawsuit follows up on another complaint filed in 2018 that said Musk’s insanely aggressive pay package should not prosper. The separate lawsuit also called for the board to be reorganized to offer better protection to the company’s investors. According to the Bloomberg report, the case will go to trial in October 2021.

Musk doesn’t have a salary at Tesla, but he does receive stock pay based on the automaker’s performance. The chief executive met all of the requirements for this year’s first payment, which will likely have represented Musk more than $ 7 billion. Although he will have to meet the targets for his compensation to be released, Musk could take $ 50 billion in shares.

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