US lawyers who won case against Musk seek 5.6 billion dollars of Tesla shares
2 March 2024, 19:54
The attorneys represented Tesla shareholders in the case over Elon Musk’s pay package which was decided in January.
The lawyers who successfully argued that a massive pay package for Tesla CEO Elon Musk was illegal and should be voided have asked the presiding judge to award them company stock worth 5.6 billion dollars (£4.4bn) as legal fees.
The attorneys, who represented Tesla shareholders in the case decided in January, made the request of the Delaware judge in court papers filed on Friday.
The amount would apparently be far and away the largest such award, if approved. Lawyers in class-action suits stemming from the collapse of Enron got 688 million dollars (543m) in legal fees in 2008.
“We are ‘prepared to eat our cooking,’” the Tesla plaintiff attorneys wrote in the court filing, arguing the sum is justified because they worked purely on a contingency basis for more than five years. If they lost they would have got nothing and the benefit to Tesla “was massive”, they said.
The requested award represents 11% of the Tesla stock — worth some 55 billion dollars (£43bn) — that Mr Musk was seeking in the compensation package, which Judge Kathaleen St Jude McCormick ruled illegal in January.
Not only does the request take nothing from the electric car company’s balance sheet, it is also tax deductible, the attorneys argued.
In her ruling, Judge McCormick accepted the shareholder lawyers’ argument that Mr Musk personally dictated the landmark 2018 pay package in sham negotiations with directors who were not independent.
It would have nearly doubled Mr Musk’s stake in Tesla. He currently holds 13%.
