Lawyers Request $5.6 Billion in Tesla Stock as Legal Fees in Landmark Elon Musk Pay Package Case
In a groundbreaking legal battle, lawyers who successfully argued that a massive pay package for Tesla CEO Elon Musk was illegal and should be voided have made an audacious request. They have asked the presiding judge to award them company stock worth a staggering $5.6 billion as legal fees. This request, if approved, would be the largest such award ever granted.
The attorneys, who represented Tesla shareholders in the case that was decided in January, filed court papers on Friday, urging the Delaware judge to consider their plea. The lawyers worked tirelessly on a contingency basis for over five years, meaning that if they had lost the case, they would have received no compensation. Their argument is that their efforts were instrumental in securing justice for Tesla shareholders, and therefore, they deserve a significant reward.
“We are ‘prepared to eat our cooking,'” the Tesla plaintiff attorneys stated in the court filing. They believe that the requested sum is justified given the magnitude of their work and the risks they took. The benefit to Tesla, they argue, was immense.
The requested award amounts to 11% of the Tesla stock, which is valued at approximately $55 billion. This stock was part of the compensation package that Musk was seeking, but Judge Kathaleen St. Jude McCormick ruled it illegal earlier this year. The attorneys’ request, therefore, does not impact Tesla’s balance sheet and is also tax deductible.
In addition to the stock award, the lawyers are also seeking $1.1 million in expenses. Their argument is that their dedication and commitment to the case warranted reimbursement for the costs incurred during the legal battle.
Judge McCormick’s ruling in January accepted the shareholder lawyers’ argument that Musk had personally orchestrated the landmark 2018 pay package through sham negotiations with non-independent directors. This package would have nearly doubled Musk’s stake in Tesla, as he currently holds 13% of the company.
The outcome of this legal battle has far-reaching implications for executive compensation and corporate governance. It highlights the importance of independent oversight and transparency in decision-making processes. The lawyers’ request for $5.6 billion in Tesla stock as legal fees is a bold move that could set a precedent for future cases involving high-profile executives and their compensation packages.
As the legal proceedings continue, the eyes of the business world are fixed on this landmark case. The outcome will not only determine the fate of the requested award but also shape the future of corporate governance and accountability.