$Tesla (TSLA.US)$This week, CEO Elon Musk not only faced difficulties in receiving his salary, but also caught the attention of institutional shareholders for his huge profits from selling Tesla stocks.

On Tuesday local time, an institutional shareholder accused Musk of using insider information to sell Tesla stock and earning billions of dollars in profits and demanded that the court order the Tesla CEO to return the "illegal profits".

The lawsuit comes two days before Tesla shareholders voted on whether to restore Musk's $56 billion compensation. In January of this year, a judge in Delaware found that Musk had improperly controlled the process and declared the vote invalid.

According to a lawsuit filed by the Rhode Island Employee Retirement System (ERSRI), Musk and his brother, Tesla director Kimbal Musk, sold $30 billion worth of stock in the electric car manufacturer from the end of 2021 to the end of 2022, cashing out before news that caused the company's stock price to fall was announced.

According to a lawsuit filed in Delaware's Chancery Court, Musk sold the shares at artificially inflated prices and concealed his plan to use the money to buy the social media platform Twitter, which he later renamed X. The lawsuit alleges that Musk also sold Tesla stock when he knew the company's delivery volume was well below public expectations.

ERSRI holds about 140,000 shares of Tesla stock. On Tuesday, Tesla's stock closed at $170.66, valuing those shares at approximately $24 million.

Last month, another Tesla shareholder, Michael Perry, filed a similar lawsuit in the same court, accusing Musk of engaging in insider trading when he sold more than $750 million worth of Tesla stock in late 2022.

Musk is under investigation by regulatory authorities to determine whether he violated federal securities laws when he bought Twitter stock in 2022.

ERSRI's lawsuit on Tuesday also alleged that Musk was disloyal to Tesla in several incidents, including moving Tesla employees to work at X and causing Tesla to begin paying advertising fees on Twitter after acquiring that platform.

ERSRI's chief financial officer said in a statement that the fund was concerned that Tesla's board of directors was not doing enough to oversee Musk's conflicts of interest.

The complaint also alleges that Musk helped hire Tesla employees for xAI, where he serves as CEO, and transferred AI semiconductors used for Tesla to the X messaging platform and xAI.

Concerns were raised last week over news of the shipment of AI chips, suggesting that Musk is giving priority to AI-related development outside of Tesla. In an article on X, Musk said that Tesla has no place to store and launch Nvidia's AI processors.

The road to getting paid is difficult.

Notable Tesla shareholder, the California State Teachers' Retirement System, publicly stated that it will vote against CEO Elon Musk's $56 billion compensation plan. As of the day of its most recent update of its holdings, CalSTRS held nearly 4.7 million shares of Tesla. It is worth noting that the fund held shares in the company before Tesla went public in 2010. Musk claimed that 90% of retail investors who have already voted have supported his compensation plan.

Wall Street still has diverging views on this week's vote. Wedbush Securities analyst Dan Ives expects the 2018 package to gain approval again and the previous ruling by a Delaware court to have no real significance, as Tesla would also gain shareholder approval and the company is registered in Texas.

Despite the Norwegian sovereign wealth fund's announcement that it will vote against the proposal, Barclays still believes that Tesla shareholders will approve Elon Musk's 2018 compensation plan.

At the same time, Beld warned that rejection of Musk's compensation plan is a realistic scenario, partly because many retail investors have not voted or are following historical trends of following proxy recommendations. If rejected, it would mean that Tesla would need to restate historical financials and reduce the number of shares and general administrative expenses. However, the company believes that the risk of Elon Musk threatening to leave Tesla would cause the stock price to fall by at least 5%.

Other analysts have also warned that if there is a legal dispute between Musk and his company, the stock price will fluctuate.

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