Tesla shareholders will appear in court on Monday to argue that an unprecedented request for more than $7 billion in attorneys’ fees to be paid by the company is “outlandish,” the latest twist in a legal showdown over Musk’s $56 billion pay package.
The record fee request was made by investor Richard Tornetta on behalf of three law firms that represented him, including Bernstein Litowitz Berger & Grossmann. Tornetta owned nine shares of Tesla when he sued over Musk’s pay package of stock options in 2018, a legal battle he ultimately won in January when the package was voided.
The fee equals around $7.2 billion at Tesla’s Friday’s stock price and amounts to a rate of roughly $370,000 for every hour worked by the 37 lawyers, associates and paralegals, some of whom normally bill as little as $275 an hour, according to court documents submitted Tornetta’s lawyers.
“The legal fees appear exceedingly disproportionate and outlandish,” Nathan Chiu, a Tesla shareholder from New Jersey, wrote to Chancellor Kathaleen McCormick in March, according to a court filing.
Aren’t these the same investors that recently decided that that $56 billion package was reasonable? Do they even listen to themselves?
$56 billion to Elon is good because, based on his performance so far, he’s the smartest man in the world who will make the best cars and make Tesla the most important corporation on the planet.
Have those lawyers ever come up with something genius like the Cybertruck? I rest my case.
If you don’t pay the $7b then maybe next time Elon won’t get his pay package…
And it’s like one of the board members said, it’s not about money. It’s about making sure Elon is motivated and we do that…by giving him a bunch of money.
Their cognitive dissonance is strong.
I don’t disagree, however I never found anyone breaking down the % of shares that Musk owns vs others. So I think it could be that Musk plus his buddies have enough shares to get the votes for the pay package, but only 51%, leaving 49% to be annoyed at the costs.
Not quite, the case was started by a small minority investor.
Small minority is even an understatement in how small the investor is. The suit was started by a metal head who owned less than 10 shares.