Elon Musk and Tesla shareholders, who last month secured a verdict voiding the CEO’s $56 billion compensation, will put the judgment on hold until the appeal is resolved, according to a Tuesday letter from the shareholders’ lawyers to the court. He plans to ask the judge to do so.
Greg Ballaro, a lawyer for the shareholders, told Reuters that the two sides would agree to a stay if they could reach an agreement on the appeal bond.
The letter marks the first time Musk has indicated he intends to appeal the ruling, which he has criticized on social media, and seeks shareholder approval to move Tesla’s legal status to Texas, where it is headquartered. said.
Before Musk appeals, both sides plan to propose a final order for Judge Kathleen McCormick’s approval, including a motion for legal costs.
That fee will be paid by Tesla, and given the large judgment, it is likely to be the largest ever. Tesla will probably disagree.
Musk and his shareholders plan to tell the court their position on the fees by March 1, according to court filings.
If McCormick approves the fees and final order, Musk will have 60 days to appeal to the Delaware Supreme Court, but a resolution will likely take at least six months.
Musk’s lawyer did not respond to a request for comment.
An appellate bond protects successful plaintiffs in court by guaranteeing that the losing party will pay compensation if the judgment cannot be overturned.
The Jan. 30 ruling canceled Musk’s $56 billion compensation package consisting of stock options. Musk has not exercised his option to buy Tesla stock at a deep discount. Once he buys a stock, he must hold it for five years.
The lawsuit was filed by Richard Tornetta, a shareholder who was pursuing Tesla on behalf of Tesla. Shareholders benefited from the return of stock options to Tesla.
In his ruling, McCormick said Musk mismanaged the salary negotiation process and lacked information when shareholders voted to approve the package in 2018.
