Part 3/15:
However, the structure of the agreement, approved by Tesla’s shareholders, became embroiled in controversy when Richard Tornetta, a minority shareholder, filed a suit against Musk and Tesla’s board. Tornetta’s core argument was that Musk’s compensation was excessive, unfair, and possibly the result of undue influence—raising critical questions about fiduciary duties and fairness in executive compensation. The Delaware Court of Chancery initially sided with Tornetta, rescinding Musk’s pay package amid claims that it breached shareholders’ rights and the duty of loyalty.