Tesla Inc.'s Board of Directors (TSLA) must meet in court to defend a huge paycheck for CEO Elon Musk, a Delaware judge ruled, according to a published report Friday.
The decision comes in a case filed by a Tesla shareholder, who argued that the package was unjustly enriching Musk for shareholder expenses, Reuters reports.
The agreement, which was approved by the shareholders in 2018, does not entail any salaries or bonuses, instead earning large shares of stock options ties the company's market valuation regardless of whether it ever makes a profit.
The company put the value of the trade at $ 2.6 billion at the time it was approved, but some analysts said it could reach $ 70 billion if the company grows fast enough, according to the report.
Tesla shares fell $ 5.98, or 2.4%, to $ 240.62 on Friday. The company's market capital is currently just under $ 44 billion.