Lawyers involved in invalidating Elon Musk‘s $56 billion compensation package are now seeking an extraordinary $6 billion legal fee, to be paid in Tesla stock, according to court documents filed on Friday.
The request, filed with the Court of Chancery in Delaware by three law firms, highlights the unprecedented nature of the fee, amounting to an hourly rate of $288,888. This fee stems from a lawsuit brought by shareholder Richard Tornetta against Musk in 2018, contesting the exorbitant pay package, which a Delaware judge nullified in January.
Tesla is expected to foot the bill for the legal fee, as it benefited from the return of Musk’s compensation, resulting in the reinstatement of 266 million shares to the company. Judge Kathleen McCormick must approve the fee request, having previously criticized Musk’s pay as “unfathomable.”
The proposed fee structure directly links the award to the benefit generated, avoiding direct expenses from Tesla’s balance sheet. The legal team representing the shareholder emphasized the fee’s tax-deductible nature for Tesla.
The fee request marks a significant development in the ongoing legal battle over Musk’s compensation. It also highlights the complex dynamics between corporate entities and legal representation in high-stakes cases involving executive compensation.
While Tesla, Musk, and his legal team have yet to respond to the filing, the request underscores the magnitude of the case and the potential implications for future executive compensation disputes.
