Attorneys for Tesla Inc. have made a request to a Delaware judge to significantly cut down the substantial legal fees that are being sought by lawyers representing Tesla’s investors. This dispute stems from a proposed settlement worth $919 million pertaining to board pay at Tesla, the prominent electric-vehicle manufacturer. Bloomberg Law reports.
Upon settlement approval, Tesla’s board – which includes CEO Elon Musk – will be mandated to return stock options that are worth up to $735 million and eliminate three years’ worth of pay that amounts to $184 million. This is in order to settle a lawsuit that accuses the concerned directors of improperly allocating themselves hefty compensation packages in 2017 and 2018.
Attorneys from the investors’ law firms are presently seeking $230 million in fees, breaking this down to a staggering rate exceeding $10,000 per hour. Tesla’s attorneys argue that this is excessive and are asking the judge to significantly reduce this fee.
The lawsuit and the proposed settlement underscore the wider discourse around director and executive level compensation structures, often seen as being ridden with conflicts of interest and lacking in transparency. This case serves as an exemplar among several such legal battles centred on board pay and executive remuneration, topics that consistently remain central to corporate governance discussions in major global corporations.