The recent ruling in favor of shareholders against Elon Musk’s pay package at Tesla by a Delaware judge has caused a stir. The case was brought by shareholders and represented by Bernstein Litowitz Berger & Grossmann, with lead lawyer Greg Varallo stating that a fee for their services would be requested in the coming weeks, but not commenting on the amount. Delaware is a popular state for registrations of S&P 500 companies due to its advantages for corporations, such as tax benefits and predictable court outcomes. However, the large sums involved in lawsuits with these companies can be lucrative for the attorneys handling them, as evidenced by a $267 million award to lawyers representing shareholders who settled with Dell Technologies for $1 billion.
This decision has raised eyebrows in the legal and financial communities, with concerns about the size of the fee. The funding for the lawsuit against Dell was brought by funds that own VMware, and is now being contested in the Delaware Supreme Court due to its perceived excessive amount. The ruling has sparked debate over the legal and financial implications of such decisions, prompting criticism from industry figures such as Cathie Wood, CEO of ARKInvest, who labeled the court’s decision as “unAmerican”. This case highlights the potential financial stakes and ethical considerations in high-profile corporate legal battles, and the impact they can have on all parties involved.