DOVER, Del. (AP) – Lawyers who successfully argued that Tesla CEO Elon Musk's huge salary was illegal and should be voided will be awarded $5.6 billion worth of company stock to cover legal costs. I asked the presiding judge to do so.
Lawyers representing Tesla shareholders in a case decided in January made the request to a Delaware judge in court papers filed Friday.
If approved, this amount would clearly be much larger for an award of this type. Lawyers in class action lawsuits stemming from the Enron bankruptcy received a record $688 million in legal fees in 2008.
“We are 'ready to eat our own food,'” Tesla's plaintiffs' lawyers wrote in a court filing, as they worked purely on a contingent basis for more than five years. He claimed that this amount was justified. If they lost, they would have gotten nothing. The benefits for Tesla were “significant,” they said.
The requested award amounts to the 11% of Tesla stock that Musk was seeking in compensation, worth about $55 billion, but Judge Catherine St. Jude McCormick ruled in January that it was illegal. handed down a judgment.
Lawyers argued that the request would not only have no impact on the electric car company's balance sheet, but would also qualify for a tax deduction. It also seeks costs of $1.1 million.
In his ruling, Judge McCormick accepted shareholder lawyers' argument that Musk personally dictated his landmark 2018 compensation package in sham negotiations with non-independent directors.
That would almost double Musk's Tesla stock. Current ownership rate is 13%.
