Connect with us

News

Tesla investors were “coerced” and “uninformed” during Musk pay ratification vote: lawyers

Credit: Andrea Conway/X

Published

on

The legal team of Tesla investor Richard Tornetta, who held nine TSLA shares when he filed a complaint in Delaware against CEO Elon Musk’s 2018 CEO Performance Award, is not happy about Tesla’s efforts to urge the court to consider the ratification of Musk’s pay package. As per Tornetta’s lawyers, the ratification vote was coerced and uninformed — and thus invalid. 

In a filing, Tornetta’s lawyers argued that the the Delaware Court should reject the efforts of Tesla’s legal team to consider the ratification of Musk’s compensation plan by the company’s shareholders at the 2024 Annual Stockholders’ Meeting. As could be seen in the filing, Tornetta’s lawyers immediately criticized Tesla for the EV maker’s attempts to revise the court’s initial opinion about the case

“Ten leading law firms and an unlimited budget. And they still could not find it. A case, any case, holding stockholders can usurp the Supreme Court’s role and reverse this Court’s trial judgment. Quod erat demonstrandum. Delaware is not Athens. The stockholder franchise—however important—is not a ‘get out of [rescission] free’ card. Defendants’ proposal is a dangerous paradigm shift: Courts would be subject to vox populi, and stockholders could overturn trial judgments,” Tornetta’s lawyers wrote. 

The plaintiff’s legal team also argued that despite the successful ratification of Elon Musk’s 2018 pay package at the 2024 Annual Stockholders’ Meeting, shareholders were still coerced and uninformed. The lawyers pointed to Musk’s comments that he would reconsider growing Tesla’s AI efforts if his share of the company was less than 25%, among other things, as a sign of shareholder coercion. 

Advertisement

“As the Ratification vote approached, the press repeatedly reported that rejecting the Ratification would cause Musk to execute his threats to divert critical corporate opportunities from Tesla. These circumstances rendered the Ratification vote coercive—and thus invalid—by making it impossible for stockholders’ to exercise their franchise free of undue external pressure created by [Musk] that distract[ed] them from the merits of the decision under consideration,’ and ‘forc[ing] [stockholders] into a choice between a new position and a compromised position for reasons other than those related to the economic merits of the decision,’” Tornetta’s lawyers wrote. 

They also argued that investors were uninformed since Tesla director Kathleen Wilson-Thompson, who served as the Special Committee of the company’s Board of Directors, was conflicted because a substantial portion of her net worth is tied to the EV maker. “Wilson-Thompson has realized a pre-tax total of approximately $62[M] from the exercise of [Tesla] equity award. Her Tesla shares received through grants were worth ~$150M upon her Committee appointment, which she admits ‘is a meaningful portion of her net worth’… Wilson-Thompson is conflicted just like Denholm,” Tornetta’s lawyers wrote. 

A hearing for the motion to revise the Delaware Court’s initial opinion on the matter is scheduled on August 2, 2024. A number of Tesla shareholders who voted in the ratification of Musk’s pay package have noted that they intend to attend the hearing if it is public

Rochard Tornetta’s lawyers’ filing (via PlainSite) can be viewed below. 

Advertisement

gov.uscourts.delch.2018-0408-KSJM.405.0 by Simon Alvarez on Scribd

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

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.

Advertisement
Comments

Elon Musk

Elon Musk hints Tesla investors will be rewarded heavily

“Hold onto your Tesla stock. It’s going to be worth a lot, I think. That’s my bet,” Musk said.

Published

on

Credit: Grok

Elon Musk recently hinted that he believes Tesla investors will be rewarded heavily if they continue to hold onto their shares, and he reiterated that in a new interview that the company released on its social accounts this week.

Musk is one of the most successful CEOs in the modern era and has mammothed competitors on the Forbes Net Worth List over the past year as his holdings in his various companies have continued to swell.

Tesla investors, especially those who have been holding shares for several years, have also felt substantial gains in their portfolios. Over the past five years, the stock is up over 78 percent. Since February 2019, nearly seven years ago to the day, the stock is up over 1,800 percent.

Musk said in the interview:

“Hold onto your Tesla stock. It’s going to be worth a lot, I think. That’s my bet.”

It’s no secret Musk has been extremely bullish on his own companies, but Tesla in particular, because it is publicly traded.

However, the company has so many amazing projects that have an opportunity to revolutionize their respective industries. There is certainly a path to major growth on Wall Street for Tesla through its various future projects, including Optimus, Cybercab, Semi, and Unsupervised FSD.

  • Optimus (Tesla’s humanoid robot): Musk has discussed its potential for tasks like childcare, walking dogs, or assisting elderly parents, positioning it as a massive long-term driver of company value.
  • Cybercab (Tesla’s robotaxi/autonomous ride-hailing vehicle): a fully autonomous vehicle geared specifically for Tesla’s ride-sharing ambitions.
  • Semi (Tesla’s electric truck, with mentions of expansion, like in Europe): brings Tesla into the commercial logistics sector.
  • Unsupervised FSD (Full Self-Driving software achieving full autonomy without human supervision): turns every Tesla owner’s vehicle into a fully-autonomous vehicle upon release

These projects specifically are some of the highest-growth pillars Tesla has ever attempted to develop, especially in Musk’s eyes, as he has said Optimus will be the best-selling product of all-time.

Many analysts agree, but the bullish ones, like Cathie Wood of ARK Invest, are perhaps the one who believes Tesla has incredible potential on Wall Street, predicting a $2,600 price target for 2030, but this is not even including Optimus.

She told Bloomberg last March that she believes that the project will present a potential additive if Tesla can scale faster than anticipated.

Continue Reading

Cybertruck

Tesla drops latest hint that new Cybertruck trim is selling like hotcakes

According to Tesla’s Online Design Studio, the new All-Wheel-Drive Cybertruck will now be delivered in April 2027. Earlier orders are still slated for early this Summer, but orders from here on forward are now officially pushed into next year:

Published

on

(Credit: Tesla)

Tesla’s new Cybertruck offering has had its delivery date pushed back once again. This is now the second time, and deliveries for the newest orders are now pushed well into 2027.

According to Tesla’s Online Design Studio, the new All-Wheel-Drive Cybertruck will now be delivered in April 2027. Earlier orders are still slated for early this Summer, but orders from here on forward are now officially pushed into next year:

Just three days ago, the initial delivery date of June 2026 was pushed back to early Fall, and now, that date has officially moved to April 2027.

The fact that Tesla has had to push back deliveries once again proves one of two things: either Tesla has slow production plans for the new Cybertruck trim, or demand is off the charts.

Judging by how Tesla is already planning to raise the price based on demand in just a few days, it seems like the company knows it is giving a tremendous deal on this spec of Cybertruck, and units are moving quickly.

That points more toward demand and not necessarily to slower production plans, but it is not confirmed.

Tesla Cybertruck’s newest trim will undergo massive change in ten days, Musk says

Tesla is set to hike the price on March 1, so tomorrow will be the final day to grab the new Cybertruck trim for just $59,990.

It features:

  • Dual Motor AWD w/ est. 325 mi of range
  • Powered tonneau cover
  • Bed outlets (2x 120V + 1x 240V) & Powershare capability
  • Coil springs w/ adaptive damping
  • Heated first-row seats w/ textile material that is easy to clean
  • Steer-by-wire & Four Wheel Steering
  • 6’ x 4’ composite bed
  • Towing capacity of up to 7,500 lbs
  • Powered frunk

Interestingly, the price offering is fairly close to what Tesla unveiled back in late 2019.

Continue Reading

Elon Musk

Elon Musk outlines plan for first Starship tower catch attempt

Musk confirmed that Starship V3 Ship 1 (SN1) is headed for ground tests and expressed strong confidence in the updated vehicle design.

Published

on

Credit: SpaceX/X

Elon Musk has clarified when SpaceX will first attempt to catch Starship’s upper stage with its launch tower. The CEO’s update provides the clearest teaser yet for the spacecraft’s recovery roadmap.

Musk shared the details in recent posts on X. In his initial post, Musk confirmed that Starship V3 Ship 1 (SN1) is headed for ground tests and expressed strong confidence in the updated vehicle design.

“Starship V3 SN1 headed for ground tests. I am highly confident that the V3 design will achieve full reusability,” Musk wrote.

In a follow-up post, Musk addressed when SpaceX would attempt to catch the upper stage using the launch tower’s robotic arms. 

Advertisement

“Should note that SpaceX will only try to catch the ship with the tower after two perfect soft landings in the ocean. The risk of the ship breaking up over land needs to be very low,” Musk clarified. 

His remarks suggest that SpaceX is deliberately reducing risk before attempting a tower catch of Starship’s upper stage. Such a milestone would mark a major step towards the full reuse of the Starship system.

SpaceX is currently targeting the first Starship V3 flight of 2026 this coming March. The spacecraft’s V3 iteration is widely viewed as a key milestone in SpaceX’s long-term strategy to make Starship fully reusable. 

Starship V3 features a number of key upgrades over its previous iterations. The vehicle is equipped with SpaceX’s Raptor V3 engines, which are designed to deliver significantly higher thrust than earlier versions while reducing cost and weight. 

Advertisement

The V3 design is also expected to be optimized for manufacturability, a critical step if SpaceX intends to scale the spacecraft’s production toward frequent launches for Starlink, lunar missions, and eventually Mars. 

Continue Reading