Lawyers seek nearly $8b in fees after Elon Musk pay ruling

Updated

Mar 03, 2024, 02:16 AM

Published

Mar 03, 2024, 02:16 AM

WASHINGTON – 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 US$6 billion (S$8 billion) in legal fees, paid in company shares.

In a filing on March 1 with the Delaware Chancery Court, the three legal firms acknowledged the unprecedented size of the fees they are requesting but argued that winning the case in January provided “enormous benefits” to the carmaker.

“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 Mr Musk’s 2018 enormous compensation agreement worth US$55.8 billion, siding with Tesla shareholder Richard Tornetta, who claimed Mr Musk was overpaid.

The firms asked the court for reimbursement of costs incurred, which they estimate at US$1.12 million, as well as 29.4 million Tesla shares, which were listed at US$202.64 per share at the close of Wall Street on March 1.

In an unusual request, the firms want the entire amount, US$5.96 billion at today’s price, to be paid in Tesla shares.

This would represent a little under 1 per cent of Tesla’s total capital but would place the firms, combined, among Tesla’s 10 largest 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 Nr Musk’s compensation was “deeply flawed.”

In response, the South Africa-born billionaire asked Tesla shareholders to support a transfer of the company’s registration from Delaware to Texas. AFP

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