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In the world of heavy metal and legal battles, Richard Tornetta, the former thrash-metal drummer for the band Dawn of Correction, found himself at the forefront of a high-stakes courtroom drama against none other than tech billionaire Elon Musk and his electric vehicle company, Tesla.
It all started in 2018 when Tornetta, armed with just nine Tesla shares, decided to take on Musk’s ambitious $55 billion compensation plan. Tornetta, along with major pension fund CalSTRS and proxy advisory firms, believed the deal was too generous and criticized it for being excessively large.
As the legal battle unfolded, Tornetta’s legal team argued that Tesla’s board had failed to disclose crucial information to shareholders regarding the attainability of the set goals. They contended that Musk’s compensation was unnecessary to motivate him, as he already owned a substantial 22% of Tesla’s stock. The plaintiff’s legal team further claimed that internal projections showed Musk would quickly qualify for large portions of the pay package.
The trial, which took place in November 2022, saw Musk defending his compensation by stating that the funds would be used to finance interplanetary travel, emphasizing his vision for the future of humanity. Tesla directors, including Antonio Gracias, argued that the compensation plan was crucial to ensure Musk’s dedication to the electric vehicle maker.
However, the tide turned in Tornetta’s favor when, on a fateful Tuesday, Delaware Judge Kathaleen McCormick ruled that Musk’s $56 billion pay package could be voided, calling it an “unfathomable sum” that was not fair to shareholders. The judge granted Tornetta the right to rescission, directing him to work with Musk’s legal team on implementing the decision.
“Good day for the good guys,” exclaimed Greg Varallo, an attorney for Tornetta, celebrating the victory. The ruling opened the door for Musk to appeal to the Delaware Supreme Court, setting the stage for further legal battles.
In the aftermath of the ruling, Tornetta’s victory prompted discussions on Tesla’s next round of compensation negotiations with Musk. The CEO, uncomfortable leading Tesla without 25% of the voting control, had already hinted at pending discussions with the board on a new pay package. However, the uncertainty surrounding Musk’s future compensation and the potential reshuffling of the Tesla board created a sense of turmoil within the company.
As the legal dust settled, the heavy metal drummer turned shareholder activist, Richard Tornetta, found himself an unlikely hero in the fight against one of the world’s most influential tech moguls. The outcome of this legal saga not only affected Musk’s financial future but also raised questions about corporate governance and executive compensation in the fast-paced world of electric vehicles and technology.