Elon Musk has been in legal battle to regain his $56 billion Tesla pay package after losing the case in Delaware. Delaware judge who rescinded this massive pay package has ruled that she wouldn't reverse her decision and her initial ruling stands. In addition for this final decision, judge also rejected the greedy fee of $5.6 billion by plaintiff attorneys. Instead judge ruled attorneys that brought the case should be awarded $346 million. This drama has been an public display of greed and hypocrisy by all parties involved.
Back in 2018 Tesla board agreed that Elon Musk deserves massive pay package totaling to $56 billion in form or options, stocks, etc. I don't think this was for one year but rather multi-year deal. Some thought that this was done in collusion and the pay package was way too high and went against shareholder interests. Then this case was brought to the legal arena to settle the matter in the courts. Unfortunately for Musk, the court ruled that the pay package was indeed to high and there was a possibility of collusion between Musk and Tesla board in reaching this deal. So, Musk lost the case and lost the money he was promised.
This became a big deal for Musk and he even threatened publicly that he would leave Tesla and focus on other companies he runs. At the same time many shareholder sided with Elon Musk and agreed he deserved all the moneys and wanted to Elon to continue running the company. So, shareholders voted on the matter and agreed Musks's pay package should be reinstated. Since this matter was already ruled in the court, after this new development Musk and team took the case back to the court to reconsider and reinstate the pay package.
But also the attorneys that won the case for some reason decided they deserved $5.6 billion in fees and Musk and Tesla had to pay these fees. They too presented their case to the judge to be awarded this massive amount in fees. It because so obvious how greedy these attorneys were and kinda their entire premise to the lawsuit. I thought it was way too crazy for them to ask this much money in fees for winning the case. Regardless how we calculate there is no way legal fees would go that high. That is beyond ridiculous. It showed the true face and intentions of the lawyers that brought the case. Now Musk's pay package didn't look so high anymore. Musk has built the company and made it a success. $56 billion might be super high for an ordinary CEO. But Musk wasn't an ordinary CEO and more importantly shareholders didn't mind him being the highest paid CEO.
Despite shareholders' vote to reinstate Musks original pay package, this didn't resolve in the court in Musk's favor. Judge rejected to reverse her decision. She didn't accept plaintiff attorney's proposition for high fees either. However, attorneys were awarded $346 million in fees. I think it is still too high, but definitely way lower than their ask of $5.6 billion.
It is not clear if this drama is over now and all parties will move on. I am sure greed will motivate them to pursue all other available options before giving up. Considering amount of money involved both parties involved wouldn't spend much to continue fighting for every dime think they are entitled for.
Read my previous posts on this topic: