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The legal team that argued against Tesla CEO Elon Musk's record salary package now wants to be paid – a record-breaking $7.3 billion in legal fees.
Thirty-seven lawyers, employees and paralegals represented Tesla shareholder Richard Tornetta, who sued the electric car maker over Musk's $56 billion compensation offer. Tornetta won in January in a Delaware court whose judge Kathaleen McCormick rejected the severance package.
In response, Tesla held another shareholder vote in June, arguing that Musk's compensation was “not about the money” but rather about keeping his attention on the company.
Shareholders ultimately voted in favor of the compensation plan and an additional resolution to move Tesla's legal headquarters from Delaware to Texas.
Related topics: “By far over”: Elon Musk celebrates his “guaranteed win” of the highest salary package in US corporate history
On Monday, McCormick was informed by both Tornetta's and Tesla's legal teams regarding the attorneys' fees.
Tornetta's lawyers presented arguments and expert testimony to show why they deserved $7.3 billion in legal fees, made up entirely of Tesla stock. At Monday's stock price, the fee works out to about $370,000 per hour of work.
Their justification was similar to Tesla's for Musk's salary: It's not just about the money, but about incentives for future behavior.
“If Delaware continues to see value in policing bad behavior, then the incentives will be limited [for attorneys] would be a very bad idea,” said Greg Varallo, partner at Bernstein Litowitz Berger & Grossman.
Related: Elon Musk's proposed $56 billion pay package is 'obviously not about the money,' Tesla chairman writes
The lawyers said they are seeking only 11% of the Tesla shares Musk would have received had the judge not canceled his salary, rather than the usual 33% fee that Delaware allows. They said they wanted “a piece of the value pie” they “created.”
“We fought with the very best,” Varallo said. “A legal battle against Tesla is never easy. There are companies that follow the rules every day, and then there are companies like Tesla.”
Tesla attorney John Reed told McCormick that the fee demand “looks like a real lawyer's joke.”
Tesla Motors is one of the most popular electric vehicles in the world. (Photo by Scott Olson/Getty Images)
Reed said the January ruling caused Tesla's stock price to fall and raised doubts about Musk's future at the electric car maker. Although Tesla's stock did indeed fall after January, the electric car maker is up overall since January at the time of writing.
Reed demanded a fee of $13.6 million for Tornetta's lawyers.
According to court documents, more than 8,000 Tesla shareholders have sent letters and objections to the court over the legal fees.
If approved, legal fees would be the highest in U.S. corporate history, exceeding the $688 million awarded in a class action lawsuit against Enron in 2008.
Related topics: How much do CEOs earn? Highest salary packages for CEOs
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