Elon Musk wanted to receive a salary package worth $56 billion for his work at Tesla. Antonio Masiello
A Tesla shareholder’s lawyers have successfully collected Elon Musk’s $56 billion pay package from Tesla.
Now they are asking a judge to give them about 11 percent of Tesla shares, worth about $6 billion, for legal fees.
Musk called the request “criminal.”
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
Lawyers for a Tesla shareholder have successfully argued in a Delaware court that Elon Musk did not deserve a $56 billion pay package for his work at the electric vehicle maker. Instead, some of that compensation should go to them in the form of attorneys’ fees, the attorneys argued before the judge.
The lawyers argued in a written statement Friday that the fee for their litigation work made up about 11 percent of the settlement. This corresponds to a value of Tesla shares worth around 5.96 billion dollars (around 5.5 billion euros), based on the company’s current share price of 202.64 dollars (around 186.75 euros) per share .
Read too
Chemical burns and near misses: Workers at Elon Musk’s “Boring Company” suffered injuries
Judge Kathleen McCormick of the Delaware Chancery Court must now decide what portion of the compensation package the lawyers will receive as fees. Tesla and Musk still have the opportunity to appeal the decision to invalidate the CEO’s stock options.
According to the Journal, plaintiffs’ lawyers typically receive a third of the verdict or settlement amount. The lawyers argued in their statement of claim that they were not seeking the “33 percent of quantifiable benefit.” After all, they would rely on “established precedents.”
“The plaintiff’s attorneys were not paid for their work, nor were their costs or expenses reimbursed. The litigation in this matter required the use of a significant amount of plaintiff’s attorneys’ time and resources over six years, including significant out-of-pocket expenses,” the attorneys wrote.
Read too
A widow unexpectedly received $1 billion worth of Bershire shares – here’s how she’s spending the money now
Unsurprisingly, Musk is not happy with the lawyers’ demand. “The lawyers who did nothing but harm Tesla want $6 billion,” he wrote on X on Friday evening. “Criminal.”
External content not available
Your privacy settings prevent the loading and display of all external content (e.g. graphics, tables, subscription login) and social networks (e.g. Youtube, Twitter, Facebook, Instagram etc.). To display this, please activate the settings in the privacy settings.
Change privacy settings
In 2018, Richard Tornetta, a former heavy metal drummer and Tesla shareholder, sued the company. His accusation: The Tesla CEO exploited his close relationships with the company’s board members to secure a massive salary package. As a result, Tesla breached its fiduciary responsibility to its shareholders. McCormick agreed with Tornetta in January and overturned Musk’s pay package.
The decision infuriated Musk, who later announced on X that you should “never incorporate your company in the state of Delaware.” Tornetta’s lawyers, including lead attorney Greg Varallo of Bernstein Litowitz Berger & Grossman, wrote in Friday’s court filing that her team is prepared to stand up for itself.
Read too
Tomato Dynasty Mom: A small invention turned the family business into a million-dollar company
The law firms Andrews & Springer and Friedman Oster & Tejtel were also part of the plaintiffs’ team. The lawyers admitted that the sum demanded was record-breaking. “We are aware that the fee demanded is unprecedented in its absolute amount,” the lawsuit states. “The amount of the fee requested is large because the benefit that the plaintiff attorneys have achieved for Tesla was enormous.”
Musk did not immediately respond to a request for comment sent outside of business hours.
External content not available
Your privacy settings prevent the loading and display of all external content (e.g. graphics, tables, subscription login) and social networks (e.g. Youtube, Twitter, Facebook, Instagram etc.). To display this, please activate the settings in the privacy settings.
Change privacy settings