Lawyers seek nearly US$6b in fees after Musk pay ruling

WASHINGTON: The lawyers of a Tesla shareholder who helped void Elon Musk’s enormous 2018 compensation package have asked a court in the US state of Delaware for nearly $6 billion in legal fees, paid in company shares.

In a filing Friday with the Delaware Chancery Court, the three legal firms acknowledged the unprecedented size of the fees they are requesting but argued that winning the case in January provided “enormous benefits” to the carmaker.

“The size of the requested award is great because the value of the benefit to Tesla that Plaintiff’s Counsel achieved was massive,” the firms said.

The court in January approved the annulment of Musk’s 2018 enormous compensation agreement worth $55.8 billion, siding with Tesla shareholder Richard Tornetta, who claimed Musk was overpaid.

The firms asked the court for reimbursement of costs incurred, which they estimate at $1.12 million, as well as 29.4 million Tesla shares, which were listed at $202.64 per share at the close of Wall Street on Friday.

In an unusual request, the firms want the entire amount, $5.96 billion at today’s price, to be paid in Tesla shares. This would represent a little under 1 percent of Tesla’s total capital but would place the firms, combined, among Tesla’s 10 largest shareholders.

When contacted by AFP, the law firms and Tesla did not immediately respond.

In her ruling, Delaware Chancery Court Judge Kathaleen McCormick said the process of approving Musk’s compensation was “deeply flawed.”

In response, the South Africaborn billionaire asked Tesla shareholders to support a transfer of the company’s registration from Delaware to Texas.