Tesla Board’s View That Elon Musk Is Irreplaceable Emerged in Pay Trial

That deal—and the process under which it was put together—have been the subject of the trial in Delaware’s business-law court, where testimony has underscored that current and former Tesla board members have long viewed Mr. Musk as irreplaceable. 

Mr. Musk, for his part, recently identified someone as a possible successor to him as CEO, the board member

James Murdoch

testified, signaling that the serial entrepreneur might be thinking about Tesla’s next chapter. Mr. Musk said last year that Tesla didn’t have a succession plan. 

Board members’ focus around 2017 on ensuring that Mr. Musk would remain engaged in Tesla stemmed from his many other interests, including running the rocket company SpaceX.

The drag on Mr. Musk’s time at the car maker has only become more pronounced with his $44 billion acquisition late last month of Twitter Inc. Mr. Musk, at the trial, said he has recently been spending much of his time running the social-media company, though he doesn’t expect that to be the case in the long term. 

“I expect to reduce my time at Twitter and find somebody else to run Twitter over time,” he said in the Court of Chancery.

Mr. Musk’s ownership of Twitter has been defined by near-constant workforce upheaval, with a new wave of departures on Thursday after many employees rejected Mr. Musk’s demand that they commit to working “long hours at high intensity.” Mr. Musk recently raised the possibility of bankruptcy for the social-media business. 

Neither Tesla nor Twitter responded to a request for comment.

The plaintiff in the case, Richard Tornetta, a Tesla shareholder, sued current and former company board members in seeking to nullify Mr. Musk’s 2018 pay package. Mr. Tornetta alleges that the CEO controlled the board’s consideration of his grant, that the board failed to disclose crucial information to shareholders and that the package failed to motivate Mr. Musk to focus on Tesla. 

Mr. Musk echoed current and former Tesla officials in saying that he didn’t dictate the terms of his pay plan. “I was entirely focused on the execution of the company,” he testified.

Mr. Musk said he has divided his time between his endeavors, with Tesla and Space Exploration Technologies Corp., as SpaceX is formally known, taking up most of his time when the car maker’s board was considering the grant. 

“CEO is often viewed as somewhat of a business-focused role, but in reality my role is much more that of an engineer developing technology,” Mr. Musk said.

The pay deal requires Mr. Musk to remain either CEO or chief product officer and executive chairman for the tranches to vest, but doesn’t stipulate that he must dedicate a specific amount of time to the car maker. During the trial, he and other Tesla board members rejected any suggestion that the pay deal should have done so. In September 2018, Mr. Musk agreed to step down from his role as Tesla’s chairman in a settlement with the Securities and Exchange Commission.

“I’m not concerned about the amount of time that he spends,”

Robyn Denholm,

who is chair of Tesla’s board, testified remotely. “He will do whatever he needs to do to achieve the results.” 

Tesla’s board from time to time discussed finding someone else to run the company, former board member

Antonio Gracias

testified, adding, “We couldn’t find anyone.”

In his first days running Twitter, Mr. Musk blurred the lines between the social-media company and his car maker, bringing in Tesla employees on a volunteer basis to review Twitter’s engineering talent, he said in court. 

“It was very short-term,” Mr. Musk said. “It lasted for a few days or so.”

Tesla’s audit committed has discussed the matter, Mr. Murdoch said, adding that Tesla officials don’t want the work to take away from employees’ duties at the electric-vehicle maker. Mr. Murdoch is the younger son of

Rupert Murdoch,

the executive chairman of News Corp, which owns The Wall Street Journal.

Mr. Musk, who doesn’t receive a salary from Tesla, has secured all but one of the 12 tranches of options available under his 2018 grant based on Tesla’s achievement of various milestones. Tesla’s market capitalization has increased about 10-fold since shareholders signed off on the CEO’s pay package, helping the company become the world’s most valuable car maker, while making Mr. Musk the world’s wealthiest person.

Much of the trial has focused on the potential for achieving the performance targets that underpin Mr. Musk’s pay package. Attorneys for the plaintiff have argued that Tesla’s internal forecasts at the time contemplated the company soon clearing some of the hurdles required for Mr. Musk’s grant to vest. 

Mr. Musk said meeting some of the performance goals was extremely unlikely, a view that aligned with statements made by other board members. 

“Those market-cap goals were totally insane,”

Brad Buss,

a former Tesla board member, testified. “If he didn’t perform, there would be nothing paid.”

Chancellor Kathaleen McCormick, who is presiding in the nonjury trial, is expected to issue a verdict in the coming months. She also presided over Twitter’s lawsuit seeking to compel Mr. Musk to buy the social-media company. That transaction closed before the case went to trial.

Write to Rebecca Elliott at rebecca.elliott@wsj.com and Meghan Bobrowsky at meghan.bobrowsky@wsj.com

That deal—and the process under which it was put together—have been the subject of the trial in Delaware’s business-law court, where testimony has underscored that current and former Tesla board members have long viewed Mr. Musk as irreplaceable. 

Mr. Musk, for his part, recently identified someone as a possible successor to him as CEO, the board member

James Murdoch

testified, signaling that the serial entrepreneur might be thinking about Tesla’s next chapter. Mr. Musk said last year that Tesla didn’t have a succession plan. 

Board members’ focus around 2017 on ensuring that Mr. Musk would remain engaged in Tesla stemmed from his many other interests, including running the rocket company SpaceX.

The drag on Mr. Musk’s time at the car maker has only become more pronounced with his $44 billion acquisition late last month of Twitter Inc. Mr. Musk, at the trial, said he has recently been spending much of his time running the social-media company, though he doesn’t expect that to be the case in the long term. 

“I expect to reduce my time at Twitter and find somebody else to run Twitter over time,” he said in the Court of Chancery.

Mr. Musk’s ownership of Twitter has been defined by near-constant workforce upheaval, with a new wave of departures on Thursday after many employees rejected Mr. Musk’s demand that they commit to working “long hours at high intensity.” Mr. Musk recently raised the possibility of bankruptcy for the social-media business. 

Neither Tesla nor Twitter responded to a request for comment.

The plaintiff in the case, Richard Tornetta, a Tesla shareholder, sued current and former company board members in seeking to nullify Mr. Musk’s 2018 pay package. Mr. Tornetta alleges that the CEO controlled the board’s consideration of his grant, that the board failed to disclose crucial information to shareholders and that the package failed to motivate Mr. Musk to focus on Tesla. 

Mr. Musk echoed current and former Tesla officials in saying that he didn’t dictate the terms of his pay plan. “I was entirely focused on the execution of the company,” he testified.

Mr. Musk said he has divided his time between his endeavors, with Tesla and Space Exploration Technologies Corp., as SpaceX is formally known, taking up most of his time when the car maker’s board was considering the grant. 

“CEO is often viewed as somewhat of a business-focused role, but in reality my role is much more that of an engineer developing technology,” Mr. Musk said.

The pay deal requires Mr. Musk to remain either CEO or chief product officer and executive chairman for the tranches to vest, but doesn’t stipulate that he must dedicate a specific amount of time to the car maker. During the trial, he and other Tesla board members rejected any suggestion that the pay deal should have done so. In September 2018, Mr. Musk agreed to step down from his role as Tesla’s chairman in a settlement with the Securities and Exchange Commission.

“I’m not concerned about the amount of time that he spends,”

Robyn Denholm,

who is chair of Tesla’s board, testified remotely. “He will do whatever he needs to do to achieve the results.” 

Tesla’s board from time to time discussed finding someone else to run the company, former board member

Antonio Gracias

testified, adding, “We couldn’t find anyone.”

In his first days running Twitter, Mr. Musk blurred the lines between the social-media company and his car maker, bringing in Tesla employees on a volunteer basis to review Twitter’s engineering talent, he said in court. 

“It was very short-term,” Mr. Musk said. “It lasted for a few days or so.”

Tesla’s audit committed has discussed the matter, Mr. Murdoch said, adding that Tesla officials don’t want the work to take away from employees’ duties at the electric-vehicle maker. Mr. Murdoch is the younger son of

Rupert Murdoch,

the executive chairman of News Corp, which owns The Wall Street Journal.

Mr. Musk, who doesn’t receive a salary from Tesla, has secured all but one of the 12 tranches of options available under his 2018 grant based on Tesla’s achievement of various milestones. Tesla’s market capitalization has increased about 10-fold since shareholders signed off on the CEO’s pay package, helping the company become the world’s most valuable car maker, while making Mr. Musk the world’s wealthiest person.

Much of the trial has focused on the potential for achieving the performance targets that underpin Mr. Musk’s pay package. Attorneys for the plaintiff have argued that Tesla’s internal forecasts at the time contemplated the company soon clearing some of the hurdles required for Mr. Musk’s grant to vest. 

Mr. Musk said meeting some of the performance goals was extremely unlikely, a view that aligned with statements made by other board members. 

“Those market-cap goals were totally insane,”

Brad Buss,

a former Tesla board member, testified. “If he didn’t perform, there would be nothing paid.”

Chancellor Kathaleen McCormick, who is presiding in the nonjury trial, is expected to issue a verdict in the coming months. She also presided over Twitter’s lawsuit seeking to compel Mr. Musk to buy the social-media company. That transaction closed before the case went to trial.

Write to Rebecca Elliott at rebecca.elliott@wsj.com and Meghan Bobrowsky at meghan.bobrowsky@wsj.com