Tesla Attorneys Who Argued Elon Musk’s Pay Package Was Excessive Demand $6 Billion Award

Attorneys request unprecedented fee after successful suit against Elon Musk’s $56 billion pay package

Proposal would set a new record for attorney fees

Attorneys who successfully argued that Tesla CEO Elon Musk’s $56 billion pay package was excessive are demanding a Delaware judge award them nearly $6 billion.

The request from the legal team, which they are asking to be paid in Tesla’s stock, would shatter previous records for attorney fees.

“We recognize that the requested fee is unprecedented in terms of absolute size,” the three law firms said in a filing in Delaware’s Court of Chancery requesting the fee.

Elon Musk criticizes attorneys’ proposed award

Elon Musk publicly criticized the attorneys’ proposed award, describing it as “criminal” and stating that the “lawyers who did nothing but damage Tesla want $6 billion.”

The legal team represented Tesla stockholder Richard Tornetta, a former drummer for Philadelphia-based thrash band Dawn of Correction, who sued Musk in 2018 over his princely pay package.

Tornetta’s suit alleged that Musk controlled the approval process for his compensation package and that the board misled investors who voted on Musk’s windfall.

Judge Kathaleen McCormick of the Court of Chancery ruled in favor of the suit in January, voiding Musk’s pay package and deeming it “an unfathomable sum” awarded through a “deeply flawed” process.

The lawyers argued that Tesla should pay their fee because the company benefited from their win. Through the win, Tesla would receive the return of 266 million shares.

Based on Tesla’s stock value, the block of shares would be worth about $53.9 billion.

“This structure has the benefit of linking the award directly to the benefit created and avoids taking even 1 cent from the Tesla balance sheet to pay fees,” the lawyers wrote, emphasizing that the fee would be tax-deductible.

The previous record for the largest legal fee was $688 million in a 2008 securities fraud case over the collapse of Enron Corp.

Elon Musk’s response and future plans

Elon Musk, currently the richest man in the world, worth $215 billion, plans to appeal the ruling in the lawsuit. He also intends to transfer Tesla’s site of incorporation from Delaware to Texas, a move he has already made for SpaceX.

Three law firms, Bernstein Litowitz Berger and Grossmann, Friedman Oster and Tejtel, and Andrews and Springer, represented the Tesla shareholders in the suit.

With Post wires.