Lawyers Request $5.6 Billion in Tesla Stock as Legal Fees in Illegal Compensation Case
Lawyers who successfully argued that a massive pay package for Tesla CEO Elon Musk was illegal and should be voided have made an audacious request of a Delaware judge. They are asking for company stock worth $5.6 billion as legal fees.
The attorneys, who represented Tesla shareholders in the case that was decided in January, argue that the amount is justified due to the nature of their work on a contingency basis. The legal team worked tirelessly for over five years, fully aware that if they had lost the case, they would have received no compensation for their efforts.
The requested award represents an astonishing 11% of the Tesla stock, valued at approximately $55 billion, which Musk was seeking in the compensation package deemed illegal by Judge Kathaleen St. Jude McCormick.
In her ruling, Judge McCormick accepted the argument put forth by the lawyers that Musk had personally orchestrated the 2018 pay package through sham negotiations with directors who lacked independence. The proposed compensation package would have effectively doubled Musk’s current stake in Tesla, where he currently holds 13% of ownership.
This legal battle has shed light on the dubious practices surrounding executive compensation and the potential exploitation of shareholders. The outcome of this request for $5.6 billion in Tesla stock as legal fees will undoubtedly draw significant attention as it unfolds.
Analyst comment
Neutral news.
As an analyst, this request for $5.6 billion in Tesla stock as legal fees is likely to face strong opposition from Tesla and its shareholders. The outcome will depend on the judge’s decision, but it has the potential to impact Tesla’s financial position and shareholder value. Investors will closely monitor the developments of this request.
