Judge overseeing Musk's pay dispute reviews plaintiff lawyers' significant fee request

Money | July 9, 2024, 2:44 a.m.

A Delaware judge is considering a request for legal fees of over $7 billion in Tesla stock, stemming from a successful challenge to CEO Elon Musk's massive 2018 compensation package. The plaintiff attorneys argue that their work resulted in a $51.4 billion benefit for Tesla by returning shares that would have diluted stock value otherwise. Critics argue that the attorneys may have actually harmed the company by rescinding Musk's compensation package, as evidenced by a $15 billion drop in Tesla's market capitalization. Some suggest that attorneys should be paid based on hours worked rather than a percentage of the benefit gained. In response to criticism, the plaintiff attorneys have proposed an alternative fee structure of $1.44 billion in cash. The judge has yet to rule on the fee request, while a separate hearing will address Tesla shareholders' ratification of Musk's compensation package.