Legal professionals representing shareholders who efficiently challenged Elon Musk’s $56 billion pay bundle have reportedly requested a Delaware state courtroom to compensate them with Tesla Inc TSLA shares price practically $6 billion.
What Occurred: The attorneys, from Bernstein Litowitz Berger & Grossmann, submitted their request to the Delaware Courtroom of Chancery on Friday, as reported by the Monetary Occasions.
The legal professionals acknowledged that the requested sum was unprecedented however argued that it was in step with earlier Delaware awards and accounted for simply 11% of shareholder restoration.
The legal professionals additional requested that they be allowed to promote these shares instantly with out a holding interval, as per the report.
Why It Issues: The request follows a major ruling final month, the place the choose overseeing the case, Kathaleen McCormick, nullified a 2018 pay bundle awarded to Musk by the Tesla board. The choose discovered the board to be insufficiently unbiased of Musk and the governance course of resulting in the grant in addition to the worth of the shares to be “unfair” to different shareholders.
Musk is predicted to enchantment in opposition to the pay nullification choice. He may problem the payment request. The legal professionals’ request for fee in Tesla shares, which might make them among the many 10 largest shareholders of the corporate, provides one other layer of complexity to the continued authorized saga.
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