Lawyers for an investor in Tesla Inc. are making headlines after filing a request for their legal fees to be paid in the form of $6 billion worth of Tesla stock. The request comes after successfully convincing a judge to invalidate Elon Musk’s $55.8 billion pay package.
In a Delaware state court, attorneys argued that they deserve more than 29 million Tesla shares instead of cash for their services. Musk responded to the request on social media, calling it “criminal.” The case involved the largest compensation award ever given to an executive.
One of the main reasons behind the request for stock instead of cash may be to prevent any negative impact on Tesla’s balance sheet. The victory in court resulted in approximately 267 million shares pledged to Musk being returned to Tesla.
The case highlighted the issue of conflicts of interest among Tesla directors, who were criticized for approving an excessive compensation plan for Musk. Musk is reportedly contemplating appealing the judge’s ruling under Delaware law.
Despite the legal battle, Musk has hinted at the possibility of receiving another substantial stock award in the future. Interestingly, he has relocated all his companies except Tesla out of Delaware for incorporation purposes.
The case, known as Tornetta v. Musk, 2018-0408, took place in the Delaware Chancery Court in Wilmington. It serves as a reminder of the power struggles and legal challenges that can arise in the corporate world. Stay tuned to The News Teller for updates on this developing story.
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