Elon Musk was supposed to receive a huge sum for his work at Tesla, which led to some discussions and even a court decision. The lawyers involved are now demanding a share – in a particularly large amount.
Following the unprecedented legal battle over Elon Musk's billion-dollar compensation at Tesla, the plaintiff's lawyers are now demanding record fees themselves. The three law firms that sued against Elon Musk's $56 billion salary package at Tesla are demanding $7 billion in fees, according to court documents released on Monday.
In a Delaware court, a shareholder's lawyer argued that this sum would “encourage lawyers to work to protect small investors.” The sum corresponds to an hourly rate of around $370,000 for each hour of work by the 37 lawyers, employees and legal assistants involved. Tesla lawyer John Reed called the demand a “real legal joke” and argued for a much lower sum of $13.6 million. The January ruling damaged the company's value by depressing the share price and creating uncertainty about Musk's future at the company.
The three firms represented Tesla investor Richard Tornetta, who owned nine Tesla shares when he successfully sued Musk's compensation package in 2018. The case took an unexpected turn when Tesla shareholders voted to confirm Musk's compensation in June anyway. Read more about it here. The company now argues that “Musk's compensation package was restored and the legal victory was turned into a loss.”
The legal fees requested represent a portion of the value that plaintiff's lawyers say was created for Tesla by a Delaware judge's January decision that struck down Musk's $56 billion compensation package. According to attorney Greg Varallo, the shareholder's legal team is seeking significantly less than the 33 percent maximum allowed by law.
More than 8,000 Tesla shareholders protested against the high compensation in around 1,500 letters and objections. Judge McCormick's decision on the fees is expected in the next few weeks or months.
