Delaware's WILMINGTON (Reuters) - According to a court document made public on Friday, Tesla is asserting that Elon Musk won his legal battle over his $56 billion compensation package since shareholders approved the payout despite a judge rescinding it earlier this year.
Two weeks have passed since Tesla shareholders cast their votes to approve the 2018 stock option plan. Following a Delaware judge's January decision to nullify the compensation due to Musk's inappropriate control over the negotiating process and Tesla's misrepresentation of material information to shareholders, the company called for a vote.
Musk's relationship with Tesla, which is having trouble with slower sales and more fierce competition, is clouded by the uncertainty surrounding the lawsuit. In the event that a larger ownership position is not obtained, he has stated that he may create some goods outside of the company.
In its proposal, Tesla presented its case for how Delaware's Court of Chancery Chancellor Kathaleen McCormick, the judge, ought to draft the final order required to carry out the January verdict. According to Tesla, "judgment is entered for the defendants" should be stated in the final ruling.
The legal team representing the shareholders wants the judge to uphold her initial decision nullifying Musk's compensation package. As a legal fee award, they want her to order Tesla to pay them possibly billions of dollars' worth of Tesla shares.
According to Tesla, a reasonable charge may be as little as $13.6 million.
On July 8, McCormick will hear oral arguments regarding the legal fee; it may take her a few weeks or longer to make a decision.
She may realize that there was little use in winning the lawsuit because Tesla shareholders desire the record-breaking compensation, even if she does not change her January verdict. The plaintiff's claims for attorneys' fees, which are predicated on the value they brought to the business by canceling the pay package, would be compromised by that.
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