Tesla shareholders are urging a Delaware judge to reject the $7 billion legal fee request made by attorneys who challenged CEO Elon Musk's pay package, which remains in legal limbo.
Tesla shareholders are set to appear in a Delaware court on Monday to call for the judge to reject the "outlandish" request for $7 billion in attorneys' fees to be paid by the company to the legal team that led the challenge to CEO Elon Musk's $56 billion pay package.
The legal fees appear exceedingly disproportionate and outlandish," Nathan Chiu, a Tesla shareholder from New Jersey, wrote to Chancellor Kathaleen McCormick of the Delaware Court of Chancery in March, according to a court filing. Chiu, the California Public Employees' Retirement System and more than 8,000 Tesla shareholders have sent the Delaware court 1,500 letters and objections related to the requested legal fee, according to court documents.
Tornetta's legal team argues they deserve the fee as compensation for the benefit they say Tesla received when the court voided Musk's pay package — which would return around 266 million shares to Tesla that had been reserved for Musk's stock options. That stock would be worth about $67 billion at Friday's price of $251.82 per share, though it was valued at $56 billion when the judge voided the compensation package.
Tesla argues that because the company's shareholders voted in June to re-ratify Musk's pay package, Tornetta's initial legal victory has been transformed into a loss — so his lawsuit hasn't conveyed any benefit to Tesla or its shareholders and Tornetta's legal team should receive as little as $13.6 million.
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