Elon Musk told a court in Delaware on Wednesday that he expected to reduce his time at Twitter and eventually find a new leader to run the social media company.
“There’s an initial burst of activity needed post-acquisition to reorganize the company,” Musk said in his testimony. “But then I expect to reduce my time at Twitter and find somebody else to run Twitter over time.”
Musk made the remarks while testifying in a trial, defending himself against claims that his pay package at Tesla Inc. — worth more than $50 billion (or roughly €50 billion) — was based on easy-to-achieve performance targets and was approved by a compliant board of directors.
Tesla investors have been increasingly concerned about the time Musk is devoting to Twitter since his protracted takeover bid went through. The company’s share prices, already trading at around 50% of the value of their 2021 peak, fell by 3% in early trading on Wall Street.
Musk’s Twitter purchase, which he partly funded by selling Tesla shares, also put pressure on the stock.
Musk admitted that some Tesla engineers had been helping in evaluating Twitter’s engineering teams, but said this was taking place “after hours” and on a “voluntary basis.”
Chaotic start at Twitter, fresh ultimatum for remaining staff
Musk’s first weeks in charge of Twitter, after months of legal wrangling over the $44 billion purchase, have been rather frenetic.
He swiftly fired the CEO and the board, and then laid off around half of Twitter’s staff by email last month. The company has also been de-listed on the New York Stock Exchange with Twitter now solely owned by Musk.
Musk sent an email to Twitter employees early on Wednesday, telling them they had until Thursday evening to decide whether they still wanted to be a part of the company.
He wrote that employees “will need to be extremely hardcore” to build “a breakthrough Twitter 2.0,” saying that long hours at high intensity would be needed for success.
Musk also said that Twitter would become much more engineering-driven, with employees who write “great code” likely to comprise the majority of the team in future.
He asked workers to click yes on a link provided in the email if they wanted to be part of the “new Twitter.” Employees who did not do so by 5 p.m. Eastern Time on Thursday would receive three months of severance pay, he said.
“Whatever decision you make, thank you for your efforts to make Twitter successful,” Musk wrote.
Other Twitter employees have reported having their employment terminated after making comments critical of the self-styled “free speech absolutist” Musk or his takeover either in public or on an internal message board for staff.
Tesla trial questions Musk’s control of company, board
Musk made some of the comments about Twitter at a trial focused on his earnings as Tesla’s “Technoking,” as the company refers to him primarily, and its chief executive officer.
Musk is accused of having a compliant Tesla board agree to performance-related targets for his pay that it knew would be simpler to achieve than it seemed at the time.
The shareholder who brought the case, Richard Tornetta, says the company improperly signed off on “the largest compensation package ever awarded to an executive,” worth well over $50 billion based on recent stock prices.
Musk argued in court that the agreement was an ambitious package of goals made when the company’s future appeared bleak.
The pay deal was approved in 2018, when investors “thought we would fail and go bankrupt,” Musk told the court.
“We were in quite a tough position at the time. We were losing a lot of money,” Musk said. “The probability of survival was extremely low.”
Tesla’s 2020-21 surge
Tesla operated at a loss for years. It only turned its first full-year profit in 2020.
It only turned its first full-year profit in 2020. And its share price exploded from less than $30 at the start of 2020 to a peak of well over $350 by late 2021.
Tesla still falls well short of other automotive giants like the Volkswagen Group in terms of both profit and revenues — yet shareholders consider it the world’s most valuable carmaker by far, probably partly because of its perceived future potential.
The company also remains reliant on its ability to sell “carbon credits” to other carmakers, essentially selling them a license to miss their CO2 emissions targets for their fleet, using the CO2 allowance that would have been offered to Tesla if its cars weren’t emissions-free at the point of use.
The development and gradual mass production rollout of Tesla’s Model 3 sedan around 2017 and 2018 helped right the company’s trajectory. It became the company’s first model to start reaching a wide market and be produced in large numbers.
“They thought electric vehicles were a joke. When the Model 3 started taking market share, they changed their plans,” Musk told the court.
The complicated pay package allowed Musk the scope to buy 1% stakes in Tesla at major discounts if the company met targets on production levels and share values.
According to a legal filing, Musk earned the equivalent of $52.4 billion in Tesla stock options over four and a half years after virtually all of the company’s targets were met.
Musk told the court that he had had no part in coming up with the payment plan.
msh/fb (AFP, AP, Reuters)