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Tesla and Musk are getting sued over CEO’s high-risk, high-reward payment plan

The Model Y unveiling event. (Credit: Teslarati)

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4 years ago

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Tesla CEO Elon Musk’s high-risk, high-reward pay package from 2018 has attracted a lawsuit from a TSLA shareholder, who argued that the executive’s compensation plan is excessive. Musk’s 2018 pay package was worth about $2.6 billion when it was approved by TSLA shareholders in early 2018. 

Tesla shareholder Richard J. Tornetta filed his lawsuit against Musk and the Tesla board after the CEO’s compensation plan was cleared. According to Tornetta, Musk’s pay package was not only excessive, its authorization by the Tesla board also amounted to a breach of the group’s fiduciary duty. The shareholder is seeking to invalidate the options grant from Musk’s plan, which has been responsible for a good portion of the CEO’s rising net worth. 

When Musk’s 2018 performance award was proposed by Tesla, the company made it a point that the 10-year payment plan would only net the CEO anything if ambitious goals were achieved. The plan, which is comprised of 12 tranches, requires several breakthroughs in Tesla’s operations and TSLA stock. Musk will only get rewards if he meets milestones such as $50 billion additions to Tesla’s market cap and other pertinent operational breakthroughs. If none of the target milestones were not met, Musk would not receive a single cent. 

Tornetta, however, argued in his case that Tesla board members had undisclosed conflicts. He also claimed that Musk crafted his own payment plan with some personal assistance of his former divorce lawyer Todd Maron, who also happened to be Tesla’s general counsel at the time. The shareholder claimed that Tesla’s board did not disclose all the information it should have to other TSLA investors before a vote on Musk’s 10-year plan was held. 

Lawyers for the Tesla CEO had requested the court for a summary judgment and sought to have Tornetta’s case dismissed. However, in a letter on February 24, court chancellor Kathleen St. J. McCormick stated that the case would be going to trial. 

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“I am skeptical that this litigation can be resolved based on the undisputed facts. So, I am canceling oral argument on the summary judgment motions. This case is going to trial,” McCormick noted. 

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Tesla begins production of new Model Y trim at Giga Berlin

Tesla announced on Monday that its Model Y Standard configuration was officially being built at Giga Berlin, less than one month after the company officially announced the configuration early last month.

Published

1 hour ago

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November 4, 2025

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Credit: Tesla

Tesla has begun production of the new Model Y trim at Gigafactory Berlin, the company’s production plant in Germany.

Tesla announced on Monday that its Model Y Standard configuration was officially being built at Giga Berlin, less than one month after the company officially announced the configuration early last month.

On October 7, Tesla announced the launch of the Model 3 and Model Y Standard trim levels, its answer to the call for affordable EVs within its lineup and its response to the loss of the $7,500 electric vehicle tax credit.

On October 3, Tesla started production of the vehicles in Germany:

The Standard iteration of the Model Y is void of many of the more premium features that are available in the Rear-Wheel-Drive, All-Wheel-Drive, and Performance trims of the vehicle are equipped with.

A few of the features of the Model Y Standard are:

  • Single Motor configuration
  • No rear touchscreen
  • Textile seats with vegan leather, instead of all vegan leather
  • 320-mile range
  • No glass roof

The launch of the Model Y Standard was truly a move to help Tesla get vehicles into the sub-$40,000 price point, and although many consumers were hoping to see the company get closer to $30,000 with these cars, this is a great starting point.

Deliveries in the United States have already started, and it seems it will be a vehicle that will do one of two things: either push some consumers to finally make the jump to Tesla, or it will give car buyers another reason to buy the Premium trims, as they may feel the lack of features is not a good enough deal.

This is something we saw with the Cybertruck’s Rear-Wheel-Drive configuration, which launched last year and ended up being more of the latter option listed above.

The Tesla Model Y Standard is actually a great deal in Europe

It was only a $10,000 discount from the All-Wheel-Drive Cybertruck, but it also did not have adaptive air suspension, premium interiors, or the powered tonneau cover, which many people felt was too much of a sacrifice.

The Rear-Wheel-Drive Cybertruck was discontinued only a few months later.

It does not seem as if this is the case with the Model Y Standard, which already seems to be an attractive option to some buyers.

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Cybertruck

Tesla begins wide rollout of Full Self-Driving v14 to Cybertruck

Published

16 hours ago

on

November 3, 2025

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Credit: Weibo (via YYDS on X)

Tesla has officially begun the wide rollout of Full Self-Driving (Supervised) v14 to the Cybertruck about a month after the company started rolling it out to other vehicles in the fleet.

On Monday, Tesla officially started rolling out v14.1.5 to Cybertruck owners, the first FSD v14 rollout for owners of the all-electric pickup.

Owners have been anxiously waiting for Tesla to begin the wide release of v14 to Cybertruck, as the company said it would refine the suite for the vehicle.

Tesla has finally started rolling out to many owners, who are reporting that their Cybertrucks are downloading Software Update 2025.38.8.5, which contains FSD v14.1.5:

Tesla has to be more cautious with rolling out FSD on the Cybertruck than on other vehicles for a few reasons. Initially, the Cybertruck utilizes an all-wheel steering system that turns differently than the S3XY lineup. This creates a challenge for the Tesla AI team as they have to cater to this specific maneuvering change.

Additionally, the Cybertruck is much larger, and the exterior cameras responsible for seeing the vehicle’s surroundings are placed differently than those of the other vehicles.

This requires additional calibration to ensure safety.

The full release notes for Full Self-Driving v14.1.5 are as follows:

  • Added Arrival Options for you to select where FSD should park: in a Parking Lot, on the Street, in a Driveway, in a Parking Garage, or at the Curbside.
  • Added handling to pull over or yield for emergency vehicles (e.g. police cars, fire trucks, ambulances).
  • Added navigation and routing into the vision-based neural network for real-time handling of blocked roads and detours.
  • Added additional Speed Profile to further customize driving style preference.
  • Improved handling for static and dynamic gates.
  • Improved offsetting for road debris (e.g. tires, tree branches, boxes).
  • Improve handling of several scenarios including: unprotected turns, lane changes, vehicle cut-ins, and school buses.
  • Improved FSD’s ability to manage system faults and recover smoothly from degraded operation for enhanced reliability.
  • Added alerting for residue build-up on interior windshield that may impact front camera visibility. If affected, visit Service for cleaning!

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Elon Musk shuts down Tesla ‘AMG’ division speculation: ‘Focus is autonomy’

“I think it’s best to leave that to the custom shops. Tesla’s focus is autonomous cars, building futuristic autonomous cars. We want the future to look like the future.”

Published

18 hours ago

on

November 3, 2025

By

Credit: Unplugged Performance

Tesla CEO Elon Musk was asked by Joe Rogan late last week whether the company would ever consider establishing an “AMG division” like Mercedes-Benz has established for powerful, race-inspired vehicles.

However, Musk turned down any talk of that, highlighting that the company is laser-focused on autonomous vehicles, seemingly hinting that any distraction from autonomy would be a detriment to the future.

Rogan drives a Tesla Model S himself, but it is not your run-of-the-mill all-electric sedan. Already outfitted with the Plaid powertrain that Tesla developed, Rogan took his vehicle to Unplugged Performance for a true performance outfitting.

The vehicle is completely overhauled with performance parts and seats. Known as the Model S-APEX, Rogan took delivery of it from Unplugged in January.

Rogan asked Musk on Friday during his most recent appearance on the Joe Rogan Experience podcast whether Tesla would ever establish an “AMG division” that would focus on catering Teslas to performance-based standards.

Musk said:

“I think it’s best to leave that to the custom shops. Tesla’s focus is autonomous cars, building futuristic autonomous cars. We want the future to look like the future.”

Tesla fans have said for years that the company should consider acquiring Unplugged Performance and its Upfit Tesla division, which recently outfitted the Las Vegas Metropolitan Police Department’s fleet of Cybertruck cruisers.

However, it seems Tesla will keep things separate. Musk is primarily focused on autonomy, which will drive the technology forward and drive shareholder growth. Something like an outfitter for performance would be a cool thing for the owners who have the interest and the money.

It’s not a tremendous revenue driver or anything that would contribute to the financial state of the company. Mercedes-Benz, for example, is more accessible for consumers as it sold over 140,000 units from its AMG brand in 2024.

Tesla Model Y driver starts race in reverse, still wins against AMG SUV

It helps with driving revenue higher by as much as 15 percent compared to similar models that are not AMGs. However, would Tesla see this much of a benefit? Likely not, because the Performance trim already caters to many owners.

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