Wilmington, Delaware – A recent legal battle involving Tesla CEO Elon Musk and a group of lawyers representing a shareholder has caused a stir in the corporate world. The lawyers successfully argued in a Delaware court that Musk’s $55 billion compensation package from Tesla was undeserved. In a bold move, they requested about 11% of Tesla shares, valued at approximately $6 billion, to cover attorney fees.
The attorneys contended that their litigation work warranted a significant portion of Musk’s compensation package, citing the current price of Tesla’s stock at $202.64 per share. Chancellor Kathleen McCormick of the Delaware Chancery Court is now tasked with determining the allocation of the compensation package for attorney fees.
While Tesla and Musk have the option to appeal the decision to void the CEO’s stock options, the plaintiff attorneys are standing firm in their request for a portion of the package. They emphasized that their request was not in line with the typical one-third fee awarded to attorneys in similar cases but was based on the work and resources invested in the six-year legal battle.
Musk expressed strong opposition to the lawyers’ demand, calling it “criminal” and highlighting the perceived damage they have inflicted on Tesla. The dispute stems from a lawsuit filed by a former heavy metal drummer and Tesla shareholder, Richard Tornetta, who accused Musk of leveraging his connections with the board to secure the lucrative pay package.
In response to the court ruling striking down Musk’s compensation package, the lead attorney for Tornetta’s legal team reiterated their commitment to pursuing the fees, acknowledging that the request was unprecedented in size. Other firms involved in the case expressed readiness to defend the record-breaking ask, emphasizing the significant benefit achieved for Tesla with the legal action.
As the legal battle continues to unfold, Musk has yet to provide a comment on the ongoing developments. The clash between the billionaire CEO and the shareholder’s legal team underscores the complex and high-stakes nature of corporate governance and executive compensation in the modern business landscape.