Lawyers who successfully argued against Tesla CEO Elon Musk’s massive pay package have requested $5.6 billion in company stock as legal fees. The Delaware judge presiding over the case will decide on the award, which could be the largest ever.
Justification for the Request
The attorneys defended Tesla shareholders in a case that concluded in January, working on a contingency basis for over five years. They argue that the requested sum is justified, given the significant benefit to Tesla. If they had lost the case, they would have received nothing.
Legal Victory and Ruling
Judge Kathaleen St. Jude McCormick ruled the compensation package sought by Musk as illegal in January. The attorneys’ successful argument contended that Musk was improperly involved in negotiations for the pay package, which would have greatly increased his stake in Tesla.
Practical Considerations
The requested stock award, which represents 11% of Tesla’s value, would not impact the company’s financials and is tax-deductible. Additionally, the attorneys are seeking $1.1 million in expenses related to the case.
This legal battle highlights the significant role lawyers play in corporate governance and executive compensation disputes.