Tesla CEO Elon Musk, among the world’s wealthiest people, has just been stripped of $56 billion in Tesla compensation after a judge sided with Richard Tornetta, a heavy metal drummer and pro audio enthusiast, who spearheaded a 2018 lawsuit against the business magnate, as Reuters reported.
Tornetta was only a minority shareholder in Tesla — to the tune of just nine shares — when he filed the suit in 2018. But the lawsuit alleged that Tesla’s board of directors had breached their fiduciary duties by approving Musk’s unusually high stock-based compensation plan that year.
Elon Musk Loses $56 Billion
Now, that compensation package — indeed to the tune of $55.8 billion — was rescinded in a decision by Judge Kathaleen McCormick of Delaware’s Court of Chancery. Musk can appeal.
The case emerged in Delaware because that’s where Telsa had incorporated. The state is well-known for its business-friendly tax laws that draw many businesses to incorporate there.
Richard Tornetta Plays Dawn of Correction’s “Shadows” in 2008
“The compensation committee nor the board acted in the best interests of the company when negotiating Musk’s compensation,” the judge said. “There is barely any evidence of negotiations at all.”
Richard Tornetta’s Band
Dawn of Correction, from Philadelphia, released their debut album, Dead Hand Control, in 2008. However, within a year of its release, the band had broken up. Tornetta now has a social media outlet where he shows his inventions and designs.
Tornetta holds a degree in industrial design, and he describes himself as a “marketer, inventor, custom fabricator, car guy, family man and drummer” on his profile on F6S, a platform that connects founders and startups to funding, according to Newsweek.
More Info About the Lawsuit
Tornetta’s lawsuit went to trial in 2022, as was widely reported at that time. But it wasn’t until this week that we learned that Musk was actually stripped of the $56 billion compensation package, as several legal experts had predicted two years ago.
Because of Delaware corporate case law, it’s a tested practice for law firms representing shareholders to partner with a small shareholder for a company, using their likeness as the face of the lawsuit to go after a CEO or board of directors. That happened here, although the practice isn’t as widespread throughout the state as it used to be.
However, per Reuters’ analysis, experts have said that cases like these, and people like Tornetta, are vital for policing untethered boardrooms. As we’ve seen in the past, Musk successfully sidestepped previous trials that accused him of breaching his duty to shareholders, violating laws, and defamation.
Dawn of Correction, “Swingin’ the Chain”
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