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Tuesday, April 23 2024
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Attorneys Demand $6 Billion in Musk Pay Dispute

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The lawyers of a Tesla shareholder who helped void Elon Musk‘s enormous 2018 compensation package have asked a court in the US state of Delaware for nearly $6 billion in legal fees, paid in company shares.
The three legal firms acknowledged the unprecedented size of the fees they are requesting in a filing made on Friday with the Delaware Chancery Court. However, they maintained that the carmaker benefited greatly from their January victory.

“The size of the requested award is great because the value of the benefit to Tesla that Plaintiff’s Counsel achieved was massive,” the firms said.
The court in January approved the annulment of Musk’s 2018 enormous compensation agreement worth $55.8 billion, siding with Tesla shareholder Richard Tornetta, who claimed Musk was overpaid.

The firms requested reimbursement from the court for estimated costs incurred, amounting to $1.12 million, along with 29.4 million shares of Tesla, which were trading at $202.64 per share at Friday’s Wall Street close.

The firms have made an uncommon request: they want to be paid in Tesla shares, which are worth $5.96 billion at current prices.

Even though this would only account for slightly less than 1% of Tesla’s total capital, the businesses would collectively rank among the company’s top 10 shareholders.

When contacted by AFP, the law firms and Tesla did not immediately respond.

In her ruling, Delaware Chancery Court Judge Kathaleen McCormick said the process of approving Musk’s compensation was “deeply flawed.”

The billionaire from South Africa then requested support from Tesla’s shareholders to move the company’s registration from Delaware to Texas.

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