Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
The lawyers who successfully argued that a massive pay package for Tesla CEO Elon Musk was illegal and should be voided are asking the presiding judge to award company stock worth $5.6 billion as legal fees
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The lawyers who successfully argued that a massive pay package for Tesla CEO Elon Musk was illegal and should be voided have asked the presiding judge to award them company stock worth $5.6 billion as legal fees.
The attorneys, who represented Tesla shareholders in the case decided in January, made the request of the Delaware judge in court papers filed Friday.
The amount would apparently be far and away the largest such award, if approved. Lawyers in class-action suits stemming from the collapse of Enron got a record $688 million in legal fees in 2008.
“We are ‘prepared to eat our cooking,’” the Tesla plaintiff attorneys wrote in the court filing, arguing the sum is justified because they worked purely on a contingency basis for more than 5 years. If they lost they would have gotten nothing. The benefit to Tesla “was massive,” they said.
The requested award represents 11% of the Tesla stock — worth some $55 billion — that Musk was seeking in the compensation package, which Judge Kathaleen St. Jude McCormick ruled illegal in January.
Not only does the request take nothing from the electric car company's balance sheet, it is also tax deductible, the attorneys argued. They are also seeking $1.1 million in expenses.
In her ruling, Judge McCormick accepted the shareholder lawyers' argument that Musk personally dictated the landmark 2018 pay package in sham negotiations with directors who were not independent.
It would have nearly doubled Musk's stake in Tesla. He currently holds 13%.