Tesla Inc (NASDAQ:TSLA) CEO Elon Musk on Friday slammed the lawyers who demanded company stock worth billions for successfully contesting his 2018 pay package. The billionaire’s retort came on the heels of an equally harsh reply to the demand from Tesla at court.
What Happened: In a filing with the Delaware Court of Chancery, Tesla said that the legal team, which represented Tesla shareholder Richard Tornetta, should be paid as little as $13.6 million for their work of contesting Musk’s 2018 pay package, reported Financial Times.
Musk’s pay package, with a value of $56 billion as of the time of award, was rescinded by the court earlier this year as “an unfathomable sum.”
The lawyers are now requesting that they be paid a legal fee of $5.2 billion for the lawsuit in company shares and neither Tesla nor Musk are willing to comply. The request was initially valued at $5.6 billion.
In the court filing, the company alleged that the proposed fees of $288,000 an hour amounted to “the highest hourly rate in history” and is 17 times larger than any fee in Delaware legal history, the report said. Tesla also alleged that the supposed benefits of the original ruling were “therapeutic or unquantifiable.”
The “justification for this extraordinary request defies established Delaware case law, mangles basic economics, and seeks to evade entirely the fairness checks this court imposes on fees,” the company’s lawyers wrote in the court filing. “This case did not require the Herculean efforts that might justify the highest hourly rate in history by many orders of magnitude,” it added.
Tornetta’s legal team comprised three law firms – Bernstein Litowitz Berger & Grossmann, Friedman Oster & Tejtel, and Andrews & Springer of Wilmington.
Musk Reacts: On the heels of media reports of Tesla’s court filing, Musk on Friday said, “They (the three law firms) deserve to repay Tesla legal costs and get nothing!”
The CEO has previously slammed the team as “evil” and even termed it “so ironic” that the lawyers who contested that his package was too high are now demanding such a package.
Tesla’s board is now attempting to reinstate the rescinded pay package with another shareholder vote, the results of which will be declared at the company’s annual shareholder meeting on June 13.
However, proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) have advised Tesla shareholders to vote against Musk’s pay package claiming it to be “excessive.”
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