Elon Musk testified on Wednesday that he was not involved in the discussions among Tesla board members about a 2018 pay package that granted him billions of dollars in stock options, helping to make him the world’s richest person.
Speaking in a courtroom in Wilmington, Del., Mr. Musk pushed back against accusations in a shareholder lawsuit that the electric car company’s board was stacked with friends and other people close to him who did his bidding.
“I was completely focused” on managing Tesla, he said.
The case Mr. Musk is testifying in centers on a compensation package that awarded Mr. Musk stock options that gave him the right to acquire nearly $50 billion of Tesla shares as long as the company met certain revenue, profit and share price gain goals. The deal was one of the largest of its kind when it was put in place and became a template used by many other corporate boards to reward chief executives.
In court documents, lawyers for the shareholder who brought the case, Richard Tornetta, contend that Mr. Musk worked with a board member as early as 2017 to craft the pay package.
On the witness stand, Mr. Musk also implicitly rebutted claims in the lawsuit that the shares he already owned in Tesla — about 22 percent of the company — were incentive enough. Amid an existential struggle to ramp up manufacturing of the company’s first mass-market car, the Model 3, he said he was considering leaving Tesla.
“We were at an inflection point where we had to decide whether I would run the company or someone else would run the company,” Mr. Musk said. “I did not want to be C.E.O.”
Lawyers for Mr. Musk and Tesla directors filed a motion to dismiss the suit, but, in 2019, another Delaware judge allowed most of the case to proceed.
The case is being heard before Chancellor Kathaleen McCormick of the Delaware Court of Chancery. She also presided over the short lawsuit Twitter filed in July against Mr. Musk to force him to go through with the acquisition of the social media company that he had sought to back out of. Mr. Musk finished that deal in October.
More than a year after the 2018 pay deal was put in place, Tesla stock started climbing sharply, going from about $21 to a peak of about $410 in November 2021. It has since fallen by about 50 percent and now trades at around $190.