Elon Musk's $75b pay: Tesla, critics clash over how to resolve legal dispute

WILMINGTON, Delaware — Tesla and opponents of Elon Musk's compensation clashed on Friday (June 21) over ways to resolve the legal quagmire that has engulfed the CEO's US$56 billion (S$75.8 billion) pay package and billions of dollars in potential legal fees generated by the case.

Tesla said in a court filing that a Delaware judge should recognise a vote by Tesla shareholders in favour of the pay package and reverse her January ruling that voided the compensation.

In response, shareholder attorneys said the vote to ratify Musk's pay has no legal effect and the only way for Tesla to challenge the January ruling is to appeal to the Delaware Supreme Court.

The shareholder attorneys said that before Tesla can appeal, Chancellor Kathaleen McCormick has to determine the legal fee that the company should be ordered to pay them for winning the case.

They had previously asked for 29 million shares of Tesla stock, which is worth more than US$5 billion. But on Friday they said Tesla could as an alternative pay at least US$1.1 billion in cash, which would be justified by the court's precedent, although they described that as "unfairly low."

Tesla and the legal team for Richard Tornetta, the shareholder who sued over the pay package, have been wrestling over the best way to resolve the case and compensate the company's chief executive.

Musk said earlier this year that unless he had a larger stake in Tesla he would prefer to build some products outside the company, creating uncertainty about his future while Tesla is struggling with slower sales and stiffer competition.

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