The lawyers who helped a Tesla shareholder void Elon Musk’s $55.8 billion pay package in January are seeking $6 billion in legal fees, according to multiple outlets, an “unprecedented” figure payable in Tesla stock.
The request, filed in Delaware state court, asks for more than 29 million Tesla shares instead of cash.
The stock structure of such an arrangement would “avoid taking even one cent from the Tesla balance sheet to pay fees,” according to the filing, which noted it would also be tax-deductible for the electric car maker.
267 million shares that were initially promised to Musk through his compensation package will be returned to Tesla because Richard Tornetta, the plaintiff and Tesla investor, brought the case on behalf of shareholders, according to Bloomberg.
The attorneys recognized the fee is “unprecedented in terms of absolute size,” Reuters reported, citing their request.
The largest settlements in shareholder cases occur in federal court, according to Reuters, which reported the biggest fee secured by lawyers was for $688 million in 2008, when the legal team secured a $7.2 billion settlement in a securities fraud case involving Enron Corp.—an American energy company that collapsed in one of the largest corporate bankruptcies ever.
Musk didn’t immediately respond to Forbes’ request for comment.
Once a final judgment in the case is made, Musk will be able to appeal the ruling voiding his pay package.
“Never incorporate your company in the state of Delaware,” Musk said in January following the ruling. A little more than two weeks later, the tech billionaire filed to reincorporate his spacecraft manufacturing company, SpaceX, in Texas.
We estimate Musk’s net worth at $210.5 billion, making him the second-wealthiest person in the world behind LVMH CEO Bernard Arnault.
Musk’s voided compensation was going to be the biggest award ever given to a corporate chief. His last compensation plan from 2018 provided him with 93.9 million in stock options that were worth $86.8 billion by 2022
Judge Voids Elon Musk’s $56 Billion Pay Package From Tesla (Forbes)
Lawyers Who Killed Elon Musk’s $56 Billion Pay Pact Seek Tesla Stock (Bloomberg)
Lawyers who voided Elon Musk’s pay as excessive want a $6 bln fee (Reuters)
