Washington:
Lawyers for Tesla shareholders who helped invalidate Elon Musk’s massive 2018 compensation package have asked a U.S. court in Delaware to pay nearly $6 billion in legal fees, payable in company stock.
In a filing Friday in Delaware Chancery Court, the three law firms acknowledged the unprecedented scale of their request but argued the January win brought “substantial benefit” to the automaker .
“The damages sought are substantial because of the value of the benefits brought to Tesla by plaintiffs’ attorneys,” the companies said.
The court in January approved scrapping Musk’s massive $55.8 billion compensation deal in 2018, siding with Tesla shareholder Richard Tornetta, who claimed Musk was overpaid.
The companies are asking the court for damages incurred, which they estimate at $1.12 million, as well as 29.4 million Tesla shares, which were trading at $202.64 per share at Wall Street’s close on Friday.
In an unusual request, the companies want to pay the entire amount ($5.96 billion at today’s prices) in Tesla stock.
That would represent just under 1% of Tesla’s total capitalization, but would put the companies combined among Tesla’s 10 largest shareholders.
The law firm and Tesla did not immediately respond when contacted by AFP.
Delaware Chancery Court Judge Katherine McCormick said in her ruling that the process for approving Musk’s pay was “seriously flawed.”
In response, the South African-born billionaire asked Tesla shareholders to support moving the company’s domicile from Delaware to Texas.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
