Elon Musk Recently Floated Possibility of Having a Successor at Tesla, a Board Member Says
WILMINGTON, Del.—
Elon Musk
recently floated the possibility of someone succeeding him as
Tesla Inc.
TSLA -3.86%
chief executive, a board member said Wednesday while testifying in a trial over the CEO’s pay package at the electric-vehicle maker.
The board member, James Murdoch, said Mr. Musk in recent months identified a potential successor who could serve as CEO of Tesla. Mr. Murdoch didn’t identify that person.
The comment by Mr. Murdoch is a sign Mr. Musk may be thinking about Tesla’s next chapter. As recently as last year, Mr. Musk said Tesla didn’t have a succession plan.
Tesla didn’t immediately respond to a request for comment. Mr. Musk said in August at the company’s annual shareholder meeting that he intended to stay at Tesla as long as he could be useful. He has often expressed a distaste for being CEO, a perspective he reprised on the stand Wednesday.
Mr. Musk runs Twitter Inc. and rocket company SpaceX, in addition to Tesla, and recently said he had too much work on his plate.
“I expect to reduce my time at Twitter and find somebody else to run Twitter over time,” he testified at trial. He also said he has been spending most of his time of late focusing on Twitter, which he acquired last month for $44 billion.
Mr. Musk added that he expected “the fundamental organizational restructuring” of Twitter to be completed soon.
Mr. Musk’s appearance in the Court of Chancery comes at a turbulent time for the entrepreneur. He recently raised the possibility of bankruptcy for Twitter, has laid off around 50% of the social-media platform’s staff and has tried to implement various product changes. Minutes before beginning his testimony, Mr. Musk was tweeting about Twitter.
Mr. Musk was on the stand in Delaware’s business-law court because of a shareholder lawsuit over his 2018 pay package at Tesla, worth around $50 billion at recent share prices.
Richard Tornetta, the shareholder, is seeking to nullify Mr. Musk’s grant, alleging that the CEO controlled the board’s consideration of his pay package and that the board failed to disclose crucial information to shareholders, who signed off on it.
Mr. Musk said he didn’t dictate the terms of his pay plan and was focused on running the business. “I was entirely focused on the execution of the company,” he said.
Mr. Musk said he has divided his time between his endeavors, with Tesla and SpaceX taking up most of his time when Tesla’s board was considering his latest grant. In recent years, Tesla has consumed more of Mr. Musk’s time than his other businesses have, he said.
“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,” a soft-spoken Mr. Musk said.
Tesla’s board at times has considered whether Mr. Musk would better serve Tesla in the role of chief product officer, rather than CEO, but couldn’t find anyone to replace him, former board member
Antonio Gracias
said Wednesday.
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 having achieved various milestones. Tesla’s market capitalization has increased more than 10-fold since shareholders signed off on the CEO’s pay package in March 2018, helping it become the world’s most valuable car maker, while making Mr. Musk the world’s wealthiest person.
An attorney for the plaintiff, who has accused Tesla’s board of misleading shareholders about Mr. Musk’s package, on Tuesday displayed historical Tesla records showing that internal projections at the time forecast the company would soon clear some of the hurdles required for Mr. Musk’s grant to vest. The company told shareholders in 2018 that the milestones were “challenging” and “difficult to achieve.”
Mr. Musk said meeting some of the goals was “extremely unlikely.” Mr. Gracias later said of certain Tesla financial projections made in 2017 and 2018: “These were our stretch, stretch goals.”
Photos: How Elon Musk Made His Fortune
The cross examination of Mr. Musk at times turned combative as a plaintiff’s attorney pressed him to provide shorter answers and the CEO challenged the questioning. At one point the presiding judge, Chancellor
Kathaleen McCormick,
cut off a lengthy explanation by Mr. Musk. The judge 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.
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Is Elon Musk compensation package at Tesla fair? Why or why not? Join the conversation below.
Mr. Musk subsequently asked, “Are we in the Tesla trial or the Twitter trial?” after a plaintiff’s attorney reviewed certain management changes Mr. Musk made upon taking over the social-media company.
The plaintiff’s attorney later asked Mr. Musk if he was a trained lawyer. “I have some familiarity with the legal system,” Mr. Musk said. “If you’re in enough lawsuits, you pick up a few things along the way.”
Ms. McCormick, the judge in the five-day, nonjury trial, isn’t expected to issue a verdict for months after the trial concludes.
Write to Rebecca Elliott at [email protected] and Meghan Bobrowsky at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
WILMINGTON, Del.—
Elon Musk
recently floated the possibility of someone succeeding him as
Tesla Inc.
TSLA -3.86%
chief executive, a board member said Wednesday while testifying in a trial over the CEO’s pay package at the electric-vehicle maker.
The board member, James Murdoch, said Mr. Musk in recent months identified a potential successor who could serve as CEO of Tesla. Mr. Murdoch didn’t identify that person.
The comment by Mr. Murdoch is a sign Mr. Musk may be thinking about Tesla’s next chapter. As recently as last year, Mr. Musk said Tesla didn’t have a succession plan.
Tesla didn’t immediately respond to a request for comment. Mr. Musk said in August at the company’s annual shareholder meeting that he intended to stay at Tesla as long as he could be useful. He has often expressed a distaste for being CEO, a perspective he reprised on the stand Wednesday.
Mr. Musk runs Twitter Inc. and rocket company SpaceX, in addition to Tesla, and recently said he had too much work on his plate.
“I expect to reduce my time at Twitter and find somebody else to run Twitter over time,” he testified at trial. He also said he has been spending most of his time of late focusing on Twitter, which he acquired last month for $44 billion.
Mr. Musk added that he expected “the fundamental organizational restructuring” of Twitter to be completed soon.
Mr. Musk’s appearance in the Court of Chancery comes at a turbulent time for the entrepreneur. He recently raised the possibility of bankruptcy for Twitter, has laid off around 50% of the social-media platform’s staff and has tried to implement various product changes. Minutes before beginning his testimony, Mr. Musk was tweeting about Twitter.
Mr. Musk was on the stand in Delaware’s business-law court because of a shareholder lawsuit over his 2018 pay package at Tesla, worth around $50 billion at recent share prices.
Richard Tornetta, the shareholder, is seeking to nullify Mr. Musk’s grant, alleging that the CEO controlled the board’s consideration of his pay package and that the board failed to disclose crucial information to shareholders, who signed off on it.
Mr. Musk said he didn’t dictate the terms of his pay plan and was focused on running the business. “I was entirely focused on the execution of the company,” he said.
Mr. Musk said he has divided his time between his endeavors, with Tesla and SpaceX taking up most of his time when Tesla’s board was considering his latest grant. In recent years, Tesla has consumed more of Mr. Musk’s time than his other businesses have, he said.
“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,” a soft-spoken Mr. Musk said.
Tesla’s board at times has considered whether Mr. Musk would better serve Tesla in the role of chief product officer, rather than CEO, but couldn’t find anyone to replace him, former board member
Antonio Gracias
said Wednesday.
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 having achieved various milestones. Tesla’s market capitalization has increased more than 10-fold since shareholders signed off on the CEO’s pay package in March 2018, helping it become the world’s most valuable car maker, while making Mr. Musk the world’s wealthiest person.
An attorney for the plaintiff, who has accused Tesla’s board of misleading shareholders about Mr. Musk’s package, on Tuesday displayed historical Tesla records showing that internal projections at the time forecast the company would soon clear some of the hurdles required for Mr. Musk’s grant to vest. The company told shareholders in 2018 that the milestones were “challenging” and “difficult to achieve.”
Mr. Musk said meeting some of the goals was “extremely unlikely.” Mr. Gracias later said of certain Tesla financial projections made in 2017 and 2018: “These were our stretch, stretch goals.”
Photos: How Elon Musk Made His Fortune
The cross examination of Mr. Musk at times turned combative as a plaintiff’s attorney pressed him to provide shorter answers and the CEO challenged the questioning. At one point the presiding judge, Chancellor
Kathaleen McCormick,
cut off a lengthy explanation by Mr. Musk. The judge 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.
SHARE YOUR THOUGHTS
Is Elon Musk compensation package at Tesla fair? Why or why not? Join the conversation below.
Mr. Musk subsequently asked, “Are we in the Tesla trial or the Twitter trial?” after a plaintiff’s attorney reviewed certain management changes Mr. Musk made upon taking over the social-media company.
The plaintiff’s attorney later asked Mr. Musk if he was a trained lawyer. “I have some familiarity with the legal system,” Mr. Musk said. “If you’re in enough lawsuits, you pick up a few things along the way.”
Ms. McCormick, the judge in the five-day, nonjury trial, isn’t expected to issue a verdict for months after the trial concludes.
Write to Rebecca Elliott at [email protected] and Meghan Bobrowsky at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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