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.
If granted, the legal eagles’ jaw-dropping payday — which they’re asking to be paid in the electrical car-maker’s stock — would shatter previous records for attorneys fees.
“We recognize that the requested fee is unprecedented by way of absolute size,” the three law firms said in a filing in Delaware’s Court of Chancery requesting the fee.
The proposed fee translates to an hourly rate of $288,888, they noted.
Elon Musk slammed the attorneys’ proposed award as “criminal,” writing on his social media platform X that the “lawyers who did nothing but damage Tesla want $6 billion.”
The legal team represented Tesla stockholder Richard Tornetta, a onetime drummer for Philadelphia-based thrash band Dawn of Correction, who in 2018 sued Musk over his princely pay package.
The suit, brought by Tornetta on behalf of his fellow stockholders, alleged Musk ultimately controlled the approval process to find out the conditions of his compensation package and that the board misled investors who ultimately voted on the CEO’s windfall.
In January, Judge Kathaleen McCormick of the Court of Chancery ruled in favor of the suit in voiding Musk’s pay package, deeming his compensation “an unfathomable sum” that was awarded through a “deeply flawed” process.
The lawyers argued Tesla should pay their eye-popping fee since the vehicle maker benefited from their win, which might see the return of 266 million shares to the electrical carmaker.
Tesla stock closed Friday at $202.62, meaning that block of shares is price about $53.9 billion.
“This structure has the advantage of linking the award on to the profit created and avoids taking even 1 cent from the Tesla balance sheet to pay fees,” the lawyers wrote.
They noted the fee can be tax-deductible.
The previous record for the biggest legal fee was $688 million, awarded in 2008 to lawyers who won a $7.2 billion settlement in a securities fraud case over the collapse of Enron Corp.
Musk is currently the richest man on the earth, price $215 billion, in keeping with the Bloomberg Billionaires Index.
He is anticipated to appeal the ruling and has said he’s seeking to transfer Tesla’s site of incorporation from Delaware, which about 70% of major firms call home, to Texas following the suit.
He moved SpaceX’s incorporation to Texas two weeks ago.
Three law firms represented the Tesla shareholders within the suit: Bernstein Litowitz Berger and Grossmann, and Friedman Oster and Tejtel, each of Recent York; and Andrews and Springer of Wilmington, DE.
With Post wires.