Dover, Delaware – Lawyers advocating for Tesla CEO Elon Musk’s pay package to be deemed invalid have now requested $5.6 billion in company stock as their legal fees. These attorneys, who represented Tesla shareholders in the case resolved in January, submitted this request to the judge in Delaware on Friday. This amount would be the largest award of its kind if approved, surpassing the $688 million garnered by lawyers in class-action suits related to Enron’s collapse in 2008.
In court documents, the Tesla plaintiff attorneys expressed their willingness to accept the award, highlighting that they had diligently worked on a contingency basis for over 5 years. Their argument emphasized the immense benefit Tesla received from their efforts, stating that had they lost, they would have received nothing in return. The attorneys are also seeking $1.1 million in expenses in addition to the stock award, which equates to 11% of the $55 billion Tesla stock Musk was aiming to attain through the compensation package deemed illegal by Judge Kathaleen St. Jude McCormick.
The lawyers defending the Tesla shareholders further justified their request by pointing out that it would not impact the company’s balance sheet and would be tax deductible. They underscored that Musk had personally orchestrated the disputed 2018 pay package through negotiations that were deemed insincere by Judge McCormick, as the directors involved were not considered independent. This package would have significantly increased Musk’s stake in Tesla, from his current ownership of 13%.
This legal battle reflects the ongoing scrutiny surrounding executive compensation and corporate governance, resonating with shareholders and industry observers alike. The request for $5.6 billion in company stock as legal fees underscores the magnitude of the case’s outcome and its implications for corporate practices moving forward. The decision on this unprecedented request will undoubtedly draw attention to the broader conversation on executive pay and shareholder rights in the corporate landscape.