According to court documents released on Friday, Tesla Inc. states that Elon Musk has emerged victorious in a legal battle over his $56 billion compensation package. This victory comes after shareholders voted in favor of the pay, despite a judge previously setting it aside earlier this year.
The company’s submission comes following Tesla shareholders’ approval of his stock option package for 2018, conducted two weeks ago. This decision was made after a Delaware judge voided the compensation in January due to alleged mismanagement by Musk during negotiations and misleading shareholders about critical details.
The ongoing lawsuit has strained Musk’s relationship with Tesla, as the company grapples with declining sales and mounting competition. Musk has hinted at developing products outside of Tesla if he fails to secure a larger ownership stake.
In its proposal, Tesla has outlined to Delaware Chancery Court Judge Katherine McCormick how the final order should be drafted to implement her January ruling. The company argues that the order should declare “judgment is entered in favor of the defendants.”
Shareholders’ lawyers are urging the judge to uphold the previous ruling that invalidated Musk’s compensation package. They are seeking a directive for Tesla to issue billions of dollars in Tesla stock to cover legal expenses.
Tesla has suggested a fair fee of up to $13.6 million.
McCormick has instructed both parties to prepare briefs discussing the impact of the shareholder vote on the case and to schedule oral arguments on the matter in late July or early August.
Oral arguments on costs are set for July 8, with a decision likely to be reached after several weeks. Even if the January ruling remains unchanged, McCormick may acknowledge that the shareholder vote indicates little merit in winning the case, as Tesla shareholders appear to desire substantial compensation, which could undermine the plaintiffs’ attorneys’ fee claim based on the value they have provided by overturning the compensation packages.
Source: www.theguardian.com
