Mar 1, 2024,08:09pm EST
The legal team that played a pivotal role in nullifying Elon Musk’s $55.8 billion pay package at Tesla in January is now seeking $6 billion in legal fees, as reported by various sources. This request, filed in Delaware state court, proposes compensation in the form of more than 29 million Tesla shares instead of cash, marking an “unprecedented” move in the legal realm.
Key Facts:
- The filing highlights that structuring the compensation in Tesla stock would prevent any impact on the company’s balance sheet while being tax-deductible for the electric car manufacturer.
- Richard Tornetta, the plaintiff and Tesla investor who initiated the case on behalf of shareholders, led to the return of 267 million shares initially promised to Musk through his compensation package, according to Bloomberg.
- While the legal team acknowledges the extraordinary nature of the fee, it underscores its relevance in the context of shareholder cases.
- Notably, the largest fee previously obtained by lawyers in shareholder cases amounted to $688 million in 2008, following a $7.2 billion settlement in a securities fraud case involving Enron Corp.
Musk’s response to the request is pending, and once a final judgment is reached, he retains the option to appeal the ruling voiding his pay package.
Chief Critic: Elon Musk’s reaction to the January ruling included a declaration against incorporating companies in Delaware. Subsequently, Musk initiated the process to relocate his spacecraft manufacturing firm, SpaceX, to Texas.
Forbes Valuation: Elon Musk’s estimated net worth stands at $210.5 billion, positioning him as the world’s second-wealthiest individual after LVMH CEO Bernard Arnault.
Key Background: Musk’s nullified compensation package represented one of the largest awards ever designated for a corporate executive. His previous compensation plan in 2018 awarded him 93.9 million stock options, which appreciated to $86.8 billion by 2022.