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Tesla investor’s legal team urges DE court to respect Musk pay ratification vote

Credit: Andrea Conway/X

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7 months ago

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Tesla shareholders ratified Elon Musk’s 2018 CEO Performance Award at the 2024 Cyber Roundup, but the fight about the matter in Delaware Court is not over just yet. This was highlighted in a joinder filed by the legal team of a TSLA investor who decided to challenge the astronomical fee request of the lawyers of shareholder Richard Tornetta, who filed a legal complaint about Musk’s 2018 pay package at a time when he held just nine shares of the EV maker. 

Tornetta’s legal team has argued that they deserve to be paid over 29 million shares of TSLA for their services in the case, which translated to over $5 billion at the time or over $200,000 per hour. Tesla shareholder Amy Steffens, a longtime investor of Tesla with over 19,000 shares, secured her own legal team to challenge the fee request of Tornetta’s lawyers. Following the decision of Tesla investors to ratify Musk’s pay package at the 2024 Cyber Roundup, Tornetta’s legal team argued that the ratification of the CEO’s pay package was invalid since investors were still “coerced” and “uninformed.” The lawyers also described the events that transpired leading up to the ratification of Musk’s pay package as a “clown show.” 

Steffens’ legal team has now submitted a joinder for the case, which will hopefully be heard later this week when the court is expected to hold a hearing for the motion to reconsider the Delaware Judge’s preliminary ruling in the case. The joinder, parts of which were shared on X by Tesla investor Alexandra Merz, argued that the ratification of Musk’s pay package by TSLA shareholders showed that Tornetta’s complaint against the CEO Performance Award “provided no tangible economic benefit to Tesla or its stockholders.” Steffens’ legal team also highlighted that contrary to the claims of Tornetta’s lawyers, the shareholder vote on Musk’s pay plan is likely among the most informed stockholder votes in Delaware history. 

“The Ratification Vote was fully informed indeed, it is likely among the most informed votes in Delaware corporate history. The extensive proxy filings included this Court’s rescission opinion, so Tesla’s stockholders were well aware of the issues identified by this Court prior to their ratification vote. The ratification issue was robustly debated online, on television, and in newspapers. Opponents— including Mr. Tornetta’s experts in this litigation made their voices heard.’ When the votes came in, Mr. Tornetta lost decisively: 72% of disinterested voting shares favored ratification,” the lawyers wrote. 

Steffens’ legal team also addressed the “clown show” comment from Tornetta’s attorneys. “Mr. Tornetta’s counsel disparages this exercise of stockholder democracy as a ‘clown show.’ It is anything but. Ms. Steffens and Tesla’s other stockholders had all the relevant facts before them, including this Court’s decision, and determined that the 2018 Grant benefited them more than rescission. When stockholders freely petition their elected board for a vote, and then overwhelmingly affirm a board’s decision by voting to uphold it, further litigation by a derivative plaintiff attacking that democratically determined result is neither necessary nor appropriate,” Steffens’ legal team noted.

The longtime Tesla investors’ legal team urged the court to respect TSLA stockholders’ democracy as well. “Even beyond Due Process concerns, respect for stockholder democracy commends limiting Plaintiff’s continuing role in light of the Ratification Vote. Here, the question goes beyond Mr. Tornetta’s adequacy to the source of his authority. When Mr. Tornetta steps into the shoes of Tesla as a derivative plaintiff, he does so without democratic legitimacy. Tesla’s stockholders can vote out their directors, but they lack any democratic means to revoke Mr. Tornetta’s authority as a plaintiff. 

“Ms. Steffens respectfully suggests that in this specific context-where a supermajority of fully-informed, uncoerced stockholders unambiguously repudiates the relief obtained by a derivative plaintiff-the Court should treat this as a vote of no confidence and withdraw Mr. Tornetta’s authority to act on behalf of the Company. At the very least, where a plaintiff has shown himself willing to pay his counsel hundreds of thousands of dollars per hour to engage in legal work that conflicts directly with the wishes of the vast majority of stockholders, those stockholders should have some means (through the ballot box or the courtroom) to eliminate that plaintiff’s authority to continue to engage in such damaging conduct while purporting to act on their behalf,” the longtime TSLA shareholder’s legal team wrote. 

Tesla CEO Elon Musk seems to have appreciated the efforts of the TSLA stockholder’s legal team. Responding to a post about the matter on social media platform X, Musk responded to the shareholder’s efforts with a couple of “lit” emojis. 

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 a 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.

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Armored Tesla Cybertruck “War Machine” debuts at Defense Expo 2025

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Published

1 week ago

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February 24, 2025

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Photo: Unplugged Performance

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Tesla Megapacks chosen for 548 MWh energy storage project in Japan

Tesla plans to supply over 100 Megapack units to support a large stationary storage project in Japan, making it one of the country’s largest energy storage facilities.

Published

4 weeks ago

on

February 3, 2025

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Tesla-megapack-pilot-project-willowbrook-mall
Credit: Tesla

Tesla’s Megapack grid-scale batteries have been selected to back an energy storage project in Japan, coming as the latest of the company’s continued deployment of the hardware.

As detailed in a report from Nikkei this week, Tesla plans to supply 142 Megapack units to support a 548 MWh storage project in Japan, set to become one of the country’s largest energy storage facilities. The project is being overseen by financial firm Orix, and it will be located at a facility Maibara in central Japan’s Shiga prefecture, and it aims to come online in early 2027.

The deal is just the latest of several Megapack deployments over the past few years, as the company continues to ramp production of the units. Tesla currently produces the Megapack at a facility in Lathrop, California, though the company also recently completed construction on its second so-called “Megafactory” in Shanghai China and is expected to begin production in the coming weeks.

READ MORE ON TESLA MEGAPACKS: Tesla Megapacks help power battery supplier Panasonic’s Kyoto test site

Tesla’s production of the Megapack has been ramping up at the Lathrop facility since initially opening in 2022, and both this site and the Shanghai Megafactory are aiming to eventually reach a volume production of 10,000 Megapack units per year. The company surpassed its 10,000th Megapack unit produced at Lathrop in November.

During Tesla’s Q4 earnings call last week, CEO Elon Musk also said that the company is looking to construct a third Megafactory, though he did not disclose where.

Last year, Tesla Energy also had record deployments of its Megapack and Powerwall home batteries with a total of 31.4 GWh of energy products deployed for a 114-percent increase from 2023.

Other recently deployed or announced Megapack projects include a massive 600 MW/1,600 MWh facility in Melbourne, a 75 MW/300 MWh energy storage site in Belgium, and a 228 MW/912 MWh storage project in Chile, along with many others still.

What are your thoughts? Let me know at zach@teslarati.com, find me on X at @zacharyvisconti, or send us tips at tips@teslarati.com.

Tesla highlights the Megapack site replacing Hawaii’s last coal plant

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Elon Musk responds to Ontario canceling $100M Starlink deal amid tariff drama

Ontario Premier Doug Ford said, opens new tab on February 3 that he was “ripping up” his province’s CA$100 million agreement with Starlink in response to the U.S. imposing tariffs on Canadian goods.

Published

4 weeks ago

on

February 3, 2025

By

NORAD and USNORTHCOM Public Affairs, Public domain, via Wikimedia Commons

Elon Musk company SpaceX is set to lose a $100 million deal with the Canadian province of Ontario following a response to the Trump administration’s decision to apply 25 percent tariffs to the country.

Starlink, a satellite-based internet service launched by the Musk entity SpaceX, will lose a $100 million deal it had with Ontario, Premier Doug Ford announced today.

Ford said on X today that Ontario is banning American companies from provincial contracts:

“We’ll be ripping up the province’s contract with Starlink. Ontario won’t do business with people hellbent on destroying our economy. Canada didn’t start this fight with the U.S., but you better believe we’re ready to win it.”

It is a blow to the citizens of the province more than anything, as the Starlink internet constellation has provided people in rural areas across the globe stable and reliable access for several years.

Musk responded in simple terms, stating, “Oh well.”

It seems Musk is less than enthused about the fact that Starlink is being eliminated from the province, but it does not seem like all that big of a blow either.

As previously mentioned, this impacts citizens more than Starlink itself, which has established itself as a main player in reliable internet access. Starlink has signed several contracts with various airlines and maritime companies.

It is also expanding to new territories across the globe on an almost daily basis.

With Mexico already working to avoid the tariff situation with the United States, it will be interesting to see if Canada does the same.

The two have shared a pleasant relationship, but President Trump is putting his foot down in terms of what comes across the border, which could impact Americans in the short term.

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