Lawyers representing shareholders who quashed Elon Musk's $56 billion Tesla compensation package have submitted a request for nearly $6 billion in the electric car maker's stock as their fee.

The request, seen by The Register, filed with the Delaware Court of Chancery, seeks an award in Tesla stock, which the attorneys argue is a fair compensation for their victory in court, without affecting Tesla's cash reserves. They justify their claim by stating it aligns with the value they've secured for shareholders, calling it both "unprecedented" and "conservative."

The fee works out at almost $300,000 per hour. Nice work if you can get it.

The move comes after a court decision last month, where the judge found that a 2018 compensation package, which included substantial stock options, was unfairly approved due to the Tesla board's close ties with Musk.

The lawyers argue [PDF] that their proposed fee, taking a portion of the shares Musk would have received, is justified based on the precedent of similar cases in Delaware, where attorneys have been awarded a fraction of the recovery value for shareholders.

The case is complex because no cash was exchanged but Musk's stock options were cancelled. The legal team insists that their share-based payment request aligns with the stock returned to shareholders and is a testament to their confidence in Tesla's value.

They also seek the ability to sell the awarded shares immediately, without a holding period, which is a departure from typical restrictions in such cases.

Musk has the option to challenge the fee request and is expected to appeal the decision that nullified his pay package.

On X, Musk said: "The lawyers who did nothing but damage Tesla want $6 billion. Criminal." ®

https://www.theregister.com//2024/03/04/musk_tesla_pay_fee/