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)