Background
Lawyers representing a Tesla shareholder have successfully argued in a Delaware court that Elon Musk should not receive a $55 billion compensation package for his role at the electric vehicle (EV) company. Instead, they are requesting a portion of that package as attorney fees.
Legal Battle
In a court filing, the attorneys stated that their fee for the litigation work should amount to approximately 11% of the pay package, equivalent to around $5.96 billion in Tesla shares based on the current stock price of $202.64 per share. Chancellor Kathleen McCormick of the Delaware Chancery Court will now determine the portion of the compensation that can be allocated to attorney fees.
Musk's Response
Elon Musk and Tesla have the option to appeal the court's decision to invalidate the CEO's stock options. Musk expressed his displeasure with the lawyers' demand, calling it "criminal" and expressing dissatisfaction with their request for $6 billion in Tesla shares.
Legal Victory
The legal battle stemmed from a lawsuit filed by Richard Tornetta, a former heavy metal drummer and Tesla shareholder, alleging that Musk used his connections with the company's board to secure an exorbitant pay package, breaching fiduciary duties to shareholders. In January, Chancellor McCormick sided with Tornetta and nullified Musk's compensation deal.
Attorney Representation
Lead attorney Greg Varallo from Bernstein Litowitz Berger & Grossman, along with firms Andrews & Springer and Friedman Oster & Tejtel, represented Tornetta in the case. Despite acknowledging the unprecedented size of the requested fee, the legal team emphasized the significant benefit they achieved for Tesla through their efforts.
Conclusion
Elon Musk has not yet commented on the matter following the filing. The ongoing legal dispute underscores the complex relationship between corporate executives, shareholders, and legal representation in high-stakes compensation battles.
This article is based on a report by Business Insider.—————————————————————————————————————————————
By: lloydlee@insider.com (Lloyd Lee)
Title: Lawyers Request Nearly $6 Billion Worth of Tesla Stock After Sinking Elon Musk’s Pay Package
Sourced From: www.businessinsider.com/elon-musk-delaware-tesla-pay-package-lawyers-six-billion-stock-2024-3
Published Date: Sat, 02 Mar 2024 06:20:33 +0000
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