Lawyers who successfully argued against Musk's $56 billion package seek Tesla stock as 'fees'

The attorneys claim they deserve more than 29 million Tesla shares worth $5.6 billion.

Published on: Mar 3, 2024, 12:49:04 IST

By HT News Desk, New Delhi

Prefer HTon Google

Share via

Copy link

Lawyers who successfully argued that Elon Musk's $55.8 billion package as Tesla CEO was ‘illegal,’ have now asked the presiding judge to award them more than 29 million (2.9 crore) company shares worth $5.6 billion as 'legal fees.'

Tesla CEO Elon Musk (Reuters file photo)

The request was filed in a Delaware court on Friday, and will be heard by judge Kathleen McCormick, who rejected Tesla's pay package for Musk – designed in 2018 – on grounds that the process was ‘flawed’ and the price ‘unfair.’

Also Read: Should Tesla change state? Elon Musk launches poll after $56bn pay deal setback

In their appeal, the attorneys for Richard Tornetta, the Tesla investor who challenged the package, explained their ‘unusual’ request and why they prefer stock over cash.

“We are prepared to eat our cooking. This structure has the benefit of linking the award directly to the benefit created, and avoids taking even 1% from the Tesla balance sheet to pay fees. It is also tax-deductible by Tesla,” their filing stated.

As Tornetta, their client, fought the case on behalf of the shareholders, about 267 million (26.7 crore) shares will be returned to the world's second-largest electric vehicle manufacturer because of the investor's win, according to the filing.

Also Read: How Elon Musk's bloated Tesla pay package led to shift in Neuralink's legal home

Responding to the lawyers' demand, Musk posted on X, the social network formerly known as Twitter he acquired in October 2022: “The lawyers who did nothing but damage Tesla want $6 billion. Criminal."

If approved, the $5.6 billion amount would apparently be far and away the largest such award. Also, the case involved the largest compensation award ever to an executive.

Once Chief Judge McCormick gives her final judgment in the case, the billionaire, under Delaware laws, will have 30 days to decide whether to appeal her ruling or not.

ABOUT THE AUTHOR
HT News Desk
Follow the latest breaking news, major developments and agenda-setting stories from India and around the world with the newsdesk at Hindustan Times. Operating round the clock, the desk brings together experienced editors, reporters and correspondents to deliver fast, accurate and contextual reporting across subjects that influence public policy, governance, business, society and international affairs. The HT News Desk covers politics, elections, government policies, the economy, business and markets, science and technology, the environment, law and order, infrastructure, education, climate issues and geopolitics, while closely tracking developments across states, institutions and global capitals. The team also leads coverage of major breaking news events, policy announcements, court proceedings, natural disasters, public emergencies and significant international developments. Reports published by the newsdesk are based on information gathered from reporters on the ground, official statements, government agencies, court records, regulatory filings, recognised institutions and other authoritative sources. Stories undergo editorial scrutiny and verification processes to ensure accuracy, fairness and relevance, and are updated as events evolve and additional information becomes available. Whether covering a key political decision in New Delhi, an economic policy shift affecting millions, a landmark court ruling or a major global event, the HT News Desk aims to provide readers with reliable, fact-based journalism that delivers not only the latest developments but also the context and analysis needed to understand their wider implications.Read More

Stay updated with the latest Business News, stock market updates, petrol and diesel prices, gold and silver rates, income tax updates and major developments from India and across the world.