The Boring Company unveils first test tunnel of their transporation system in Hawthorne, California
Tesla Inc. founder Elon Musk speaks at the unveiling event by "The Boring Company" for the test tunnel of a proposed underground transportation network across Los Angeles County, in Hawthorne, California, U.S. December 18, 2018. Robyn Beck/Pool via Reuters

Elon Musk, known for his combative testimony, is set to take the stand in a Delaware court on Wednesday to defend against claims that his $56 billion Tesla Inc pay package was based on easy to achieve performance targets and influence with the board of directors.

Tesla shareholder Richard Tornetta sued Musk and the board in 2018 and hopes to prove that Musk used his dominance over the electric vehicle maker's board to dictate terms of the package, which did not require him to work at Tesla full-time.

Musk's testimony before Chancellor Kathaleen McCormick comes as he is struggling to oversee a chaotic overhaul of Twitter Inc, the social media platform he was forced to buy for $44 billion in a separate legal battle before the same judge after trying to back out of that deal.

Musk, the world's richest person, tweeted this week that he was remaining at Twitter's San Francisco headquarters around the clock until he fixed the company's problems.

Tornetta has asked the court to rescind the 2018 package, which Tornetta's attorney Greg Varallo said was $20 billion larger than the annual gross domestic product of the state of Delaware.

The legal team for Musk and the Tesla directors, who are also defendants, have cast the pay package as a set of audacious goals that worked by driving 10-fold growth in Tesla's stock value, to more than $600 billion from around $50 billion.

They have argued the plan was developed by independent board members, advised by outside professionals and with input from large shareholders.

On Monday and Tuesday, the court got a taste of Musk's testimony through short clips from his 2021 deposition in the litigation. In one clip, Musk dismissed the idea that the board should have discussed requiring that he spend more time with Tesla.

"That would have been silly," said Musk, who is also the chief executive of rocket company SpaceX and founded tunneling venture The Boring Co.

Musk has a history of combative testimony and often appears disdainful of lawyers who ask probing questions. He has called opposing attorneys "reprehensible," questioned their happiness and accused them of "extortion."

Last year, Musk told a lawyer for a shareholder suing him over the 2016 acquisition of SolarCity that he was "a bad human being."

Musk can also show his charm in court. He apologized from the stand to a British diver who he called "pedo guy" in a tweet and who sued Musk for defamation. The jury in the case found Musk did not defame the diver.

The disputed Tesla package allows Musk to buy 1% of Tesla's stock at a deep discount each time escalating performance and financial targets are met. Otherwise, Musk gets nothing.

Tesla has hit 11 of the 12 targets, according to court papers.

Shareholders generally cannot challenge executive compensation because courts typically defer to the judgment of directors. The Musk case survived a motion to dismiss because it was determined he might be considered a controlling shareholder, which means stricter rules apply.

"There is no case in which a 21.9% shareholder who is also the chief executive has received a structured payout plan of this magnitude," Lawrence Cunningham, a corporate law professor at George Washington University, said of the lack of precedent.