WILMINGTON, Delaware, April 24 (Reuters) -
A Tesla investor who successfully sued to void CEO Elon
Musk's $56 billion pay package asked a Delaware judge on
Wednesday to prevent the electric carmaker from bucking the
court's authority by moving its legal home to Texas.
Richard Tornetta's legal team asked Delaware Chancellor
Kathaleen McCormick to rule on his request before Tesla's June
13 annual meeting, where shareholders will vote on
reincorporating in Texas and approving Musk's 2018 pay package.
"Defendants cannot now seek to run from this
jurisdiction and undo years of litigation because they are
unhappy with the outcome," said the plaintiff's legal team in a
filing.
Tesla has been incorporated in Delaware for 21 years and
has required shareholders to bring legal action in that state,
the filing said.
Musk and Tesla did not immediately respond to requests
for comment.
In January, McCormick voided the pay package, which Tesla
estimated is worth up to $56 billion, calling it "unfathomable."
The judge found the stock option deal was negotiated by a
board that lacked independence from Musk and that the company
hid key details from shareholders before they approved it in a
2018 vote.
Musk has criticized Delaware and its courts following the
ruling and has said the state, home to a majority of large
publicly traded corporations, is trying to prevent companies
from leaving.
The pay package granted stock option awards for
approximately 304 million shares if Tesla hit various
milestones, which it did. Musk has not exercised the stock
options, which allow him to buy the Tesla stock at a deep
discount.
Tornetta's legal team also asked the court on Wednesday
to seize the stock options as another measure to prevent Tesla
and Musk from avoiding the January ruling.
To try to reinstate the pay package, Tesla has
employed an obscure legal maneuver
in asking shareholders to "ratify" Musk's 2018 pay. Doing
so could keep Musk motivated and potentially give Tesla an
argument against the
$6 billion in attorneys' fees
that Tornetta's lawyers have sought, the company has said.
The shareholder's request comes a day after Tesla forecast
rising sales this year and unveiled plans to roll out more
affordable models in early 2025. This eased worries about slower
growth and shares jumped more than 10% on Wednesday in early
trading.
(Reporting by Tom Hals in Wilmington, Delaware)