Tesla is asserting that CEO Elon Musk has won his legal battle over his $56 billion compensation package, citing shareholder approval as the basis for this claim.
This stance comes despite a judge rescinding the pay package earlier this year, as revealed in a court filing made public on Friday, reports the Guardian.
The filing follows a recent vote by Tesla shareholders to ratify the 2018 stock options package, conducted after a Delaware judge’s January ruling voided the compensation. The judge ruled that Musk improperly influenced the negotiation process and that Tesla misled shareholders about key details.
Tesla’s argument was outlined in a proposal to Chancellor Kathaleen McCormick of Delaware’s Court of Chancery, suggesting the final order should state that “judgment is entered for the defendants.” Meanwhile, the shareholders’ legal team urges the judge to adhere to her initial ruling and void Musk’s pay package. They are also seeking billions of dollars worth of Tesla stock as a legal fee award, whereas Tesla has suggested a fair fee could be as low as $13.6 million.
On Thursday, McCormick ordered the parties to begin preparing briefs to present their views on the impact of the shareholder vote on the case. She also asked them to agree on a date for oral arguments in late July or early August.
Oral arguments over the legal fee will be heard on July 8, and McCormick may take several weeks to issue a ruling. Even if she does not reverse her January decision, she might consider the shareholder vote as an indication of the value placed on Musk’s compensation package, potentially undermining the plaintiffs’ attorney-fee request.
