Elon Musk responded to lawyers this week regarding his Tesla compensation package in a recent Delaware lawsuit after the lawyers requested a legal award of 29 million Tesla shares, worth about $6 billion. .
Musk’s pay package at Tesla was thrown out in late January by Delaware Court of Chancery Judge Kathleen McCormick as part of a 2018 lawsuit brought by shareholder Richard Tornetta. Following the decision just over a month ago to void Musk’s $55.8 billion compensation package, Tornetta’s lawyers said in a Friday filing that he is entitled to more than 29 million Tesla shares in legal fees. (via bloomberg).
In their filing, the lawyers also explained why they asked for their fees to be paid in Tesla stock rather than cash.
“We are ready to ‘eat our own food,'” Tornetta’s attorney wrote. “This structure has the advantage that profits earned are tied directly to profits generated, eliminating the need to take a single penny out of Tesla’s balance sheet to pay fees. Tax deductible by Tesla It will be too.”
Approximately 267 million Tesla shares that were supposed to be part of Musk’s pay package will be returned to the company because Tornetta’s lawsuit was filed in court on behalf of shareholders, according to filings. It is said that
Ann Lipton, a Tulane University business law professor, said the defense team’s payout could be the largest attorney’s fee ever billed, at least to her knowledge.
“To be fair, this case involved the largest compensation ever for an executive,” Lipton added. bloomberg.
“I think the plaintiffs’ lawyers thought that if they asked for $6 billion in cash in fees, they could bankrupt Tesla,” she says. “Since this case involved a stock award to Mr. Musk, they thought it would be appropriate to seek compensation in stock so that it wouldn’t be as bad for Tesla shareholders. That was very important to me. It makes sense.”
After the filing, multiple Tesla executives responded, including Musk himself.
In a flurry of posts on X on Saturday, Musk criticized the request as “absolutely shameful,” “cynical” and “criminal,” with his lawyers calling it “evil” in two replies. You can see just a few of his posts below.
Rohan Patel, Tesla’s vice president of public policy and business development, also responded to the report, saying other employees at the company would be “equally disgusted” by the news.
After Judge McCormick’s Jan. 30 decision invalidating Musk’s compensation package, executives from multiple companies petition to move SpaceX, The Boring Company and Neuralink out of Delaware. It is expected that similar measures will be taken against Tesla.
Musk has also been outspoken since the verdict, noting that Tesla plans to appeal the verdict and pointing out how much the lawyers representing Tornetta stand to gain from the case. did. In response to a report in early February, Musk said, “It’s very seriously and completely wrong that a law firm that harmed Tesla could reap billions of dollars in profits.” Ta.
This time last year:
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