Lawyers representing a Tesla shareholder have petitioned for a substantial portion of Elon Musk’s contested $55-billion compensation package, arguing that they deserve a significant share of the payout as attorney fees.
Background
Following successful litigation in a Delaware court, attorneys asserted that Elon Musk’s compensation should be partially allocated to them. They claimed that their legal efforts, which led to the invalidation of Musk’s compensation package, warrant compensation amounting to approximately 11% of the total package. This equates to nearly $6 billion worth of Tesla shares based on the current market price.
Legal Proceedings
Chancellor Kathleen McCormick of the Delaware Chancery Court is tasked with determining the proportion of Musk’s compensation that should be allocated to attorney fees. While Tesla and Musk retain the option to appeal the court’s decision, attorneys remain steadfast in their pursuit of compensation for their services.
Attorney’s Argument
In their court filing, the attorneys emphasized the significant resources and time invested in litigating the case over a six-year period. They highlighted that their efforts were instrumental in challenging Musk’s compensation package, which they deemed excessive and detrimental to Tesla shareholders’ interests. The attorneys refuted the notion of seeking a standard one-third of the settlement amount, citing unique circumstances and the magnitude of their achievement.
Musk’s Response
Elon Musk expressed dissatisfaction with the attorneys’ demand, characterizing it as unjust and even going as far as labeling it “criminal” in a post on social media platform X. Musk’s discontent underscores the contentious nature of the compensation dispute and the stakes involved for both Tesla and its CEO.
Conclusion
The ongoing legal battle between Tesla, Elon Musk, and the shareholder’s legal representatives underscores the complexities surrounding executive compensation and corporate governance. As the dispute unfolds, all parties involved await Chancellor McCormick’s decision on the allocation of Musk’s compensation and the resolution of this contentious issue.
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