WILMINGTON, Delaware, June 17 (Reuters) - Tesla began
its fight for legal recognition of a shareholder vote favoring
Elon Musk's record compensation, telling a Delaware judge that
it "significantly impacts" her ruling voiding the pay, according
to a letter made public on Monday.
Tesla wrote to Chancellor Kathaleen McCormick that the
parties in the pay package case should now lay out their legal
interpretations of Thursday's ratification of Musk's pay, rather
than moving ahead with the case on the prior schedule.
"The approval of ratification by Tesla's stockholders
significantly impacts the claims and issues in this action,
including the court's final judgment," Tesla attorneys told
McCormick in the letter, which was filed with the Court of
Chancery on Friday.
Greg Varallo, a shareholder attorney in the case against the
pay package, said the ratification had "no legal effect" on the
case and that he would explain his argument in a brief due
Friday.
Tesla has said the ratification process was "novel" and it
was unclear if McCormick and the Delaware Supreme Court would
accept the result.
Tesla has argued that the ratification has now cured the
problems raised in McCormick's ruling in January.
The judge found Musk controlled the 2018 process that led to
the pay package and that Tesla concealed key information from
shareholders about the ease of the targets the company had to
meet for Musk to be paid.
A special committee of its board reviewed the pay package
and determine it was in the best interest of shareholders, which
Tesla said fixed the problem of Musk's dominance in the process.
The vote was corrected by providing shareholders hundreds of
pages of added disclosures, including McCormick's 200-page
opinion.
McCormick also has to determine a fee for the shareholder
legal team before Tesla can appeal her ruling to the Delaware
Supreme Court.
The shareholder's attorneys are seeking around $5 billion,
in the form of Tesla stock as a legal fee and Tesla argued they
should be paid around $13.6 million.