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Elon Musk won $56 billion payday because of vote, Tesla argues in court
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Elon Musk won $56 billion payday because of vote, Tesla argues in court
Jun 27, 2024 10:59 AM

WILMINGTON, Delaware, June 27 (Reuters) - Tesla is

claiming Elon Musk won his legal battle over his $56 billion pay

package because shareholders voted for the compensation, despite

a judge rescinding it earlier this year, according to court

filing made public on Friday.

The company's filing comes two weeks after Tesla

shareholders voted to ratify the 2018 package of stock options.

Tesla held the vote following a January ruling by a Delaware

judge to void the compensation because Musk improperly

controlled the negotiation process and the company misled

shareholders about key details.

The uncertainty in the case hangs over Musk's relationship

with Tesla, which is struggling with slower sales and stiffer

competition. He has said he might develop some products outside

the company if he does not obtain a larger ownership stake.

Tesla made its argument in its proposal for how the judge,

Chancellor Kathaleen McCormick of Delaware's Court of Chancery,

should craft a final order that is needed to implement the

January ruling. Tesla said the final order should state that

"judgment is entered for the defendants."

The shareholders' legal team wants the judge to stick with

her original ruling voiding Musk's pay package. They want her to

order Tesla to pay them potentially billions of dollars worth of

Tesla stock as a legal fee award.

Tesla's has said a fair fee might be as low as $13.6

million.

McCormick will hear oral arguments over the legal fee on

July 8 and she might take at least a few weeks before ruling.

Even if she does not reverse her January ruling, she might

recognize that the shareholder vote demonstrated that there was

little value in winning the case because Tesla shareholders want

the record-breaking compensation. That would undermine the

plaintiff's attorneys fee request, which is based on the value

they provided to the company by rescinding the pay package.

(Editing by Josie Kao)

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