Shareholder court case hears from Tesla head

The head of Tesla’s board of directors testified Tuesday in a shareholder lawsuit challenging a 2018 compensation plan for CEO Elon Musk potentially worth more than $55 billion that she was less concerned about how much time Musk would commit to the company than in the results he could bring.

“We didn’t talk about time,” Robyn Denholm said when asked about her discussions with Musk about the compensation plan, which didn’t include any requirement on how much time he would devote to the company, as opposed to his other business ventures.

“He was focused on achieving results, not on any quantum of time he would need to spend,” Denholm said. She added that she doesn’t know how many hours Musk — who last month took over Twitter after paying $44 billion for the social media platform — devotes to Tesla.

“I’m not concerned about time,” added Denholm, who was a member of the compensation committee at the electric car and solar panel maker that developed the plan. “I know periods of time where he is sleeping on the factory floor.”

The lawsuit alleges that the performance-based stock option grant was negotiated by the compensation committee and approved by Tesla board members who had conflicts interest due to personal and professional ties to Musk, including investments in his companies. It also alleges the shareholder vote approving the compensation plan was based on a misleading proxy statement.

The lawsuit alleges that the proxy wrongly described members of the compensation committee as “independent,” and characterized all of the milestones that triggered vesting in the stock options as “stretch” goals meant to be difficult to achieve, even though internal projections indicated that three operational milestones were likely to be achieved within 18 months of the stockholder vote.