Tesla News: Company To Face Trial Over CEO Elon Musk's Enormous Pay Package, Delaware Judge Rules

The board of electric carmaker Tesla (TSLA) must defend CEO Elon Musk's 2018 pay package in court, a Delaware judge ruled Friday. The plaintiff, shareholder Richard Tornetta, claims Musk's pay package has enriched Musk at the expense of Tesla investors.

Tesla's board had estimated in March 2018 that Musk's 2018 compensation package was worth $2.6 billion. However, some analysts believe that Musk's pay package could be worth as much as $70 billion, as it is tied to the company's market valuation.

Reuters noted that Musk's compensation does not include a salary or cash bonus, while it does include stock options without conditions for profitability. It's unclear what levels Tesla's stock price must reach for payouts.

Shares of Tesla fell 2.42% on Friday to close at $240.62. On March 1, 2018, Tesla shares closed at $330.93.

The ruling by Vice Chancellor Joseph Slights means potential news discovery in how the board decided to give Musk such a lucrative pay package. It also puts the board on defense that it may have breached its fiduciary duty with Musk's deal.

Tesla's board approved Musk's pay package by a 73% vote.

In 2012, a shareholder of Citigroup (C) sued the CEO and the bank's directors for awarding more than $54 million of compensation to executives. There has been no decision on the suit.