Tesla, shareholder clash over $7B legal fee request in Elon Musk pay case
- by New York Post
- Jul 08, 2024
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Delaware Chancellor Kathaleen McCormick voided Musk’s $56-billion pay package in January.
Eric Crossan via Wikipedia
More than 8,000 Tesla stockholders have flooded the court with some 1,500 letters and objections over the fee, according to court documents.
Tornetta’s attorneys said the January award was the largest judgment ever awarded by an American court, excluding punitive damages. They argued they should receive a fee equal to 11% of that judgment, a percentage that is arguably conservative by Delaware legal precedent. They asked to be paid in the form of 29 million Tesla shares.
Record fee request
The fee request vastly outstrips the current record fee in shareholder litigation of $688 million in an Enron class action, according to Stanford Law School.
More than 8,000 Tesla stockholders have flooded the court with some 1,500 letters and objections over the fee, according to court documents.
Getty Images
The Musk case took a dramatic turn when Tesla shareholders in June voted to ratify Musk’s pay, which Tesla has argued corrected the flaws in the 2018 process that McCormick identified in her ruling.
McCormick will hear arguments about the legal impact of the ratification vote in the coming weeks.
The company argues that Musk’s pay package has been restored and that Tornetta’s legal victory has been transformed into a loss. As a result, the case conveyed no benefit to Tesla and the shareholder lawyers should receive as little as $13.6 million, Tesla said.
McCormick may take weeks or months to rule on the legal fee. The Delaware Supreme Court is currently considering a $267 million fee request in a shareholder class action involving Dell Technologies and that decision could provide fee guidance.
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