On March 13th, Caixin News Agency reported that in January, a local court in Delaware, USA, where Tesla was registered, ruled against Musk's $55.8 billion high salary plan. This plan was approved by Tesla's shareholders in 2018, but in the eyes of some shareholders, it was deemed unreasonable and they filed a lawsuit.
Judge Kathaleen St. J. McCormick, who was responsible for the commercial dispute, ruled that Musk's record breaking compensation package was the highest level ever offered to corporate executives in the United States, and Tesla shareholders had clear interests involved in passing the compensation plan, so the case should be dismissed.
Musk subsequently stated that he would continue to appeal and threatened to change Tesla's registered address to Texas. However, to the climax, lawyers representing the plaintiff shareholders who defeated Musk demanded Tesla pay him up to $5.9 billion in legal fees last month, once again setting a record for the highest legal fees.
This month, the representative lawyer proposed a new plan, hoping to replace $5.9 billion in legal fees with Tesla stocks, and claimed that this would reduce the burden on Tesla shareholders. This unusual request has angered many Tesla retail shareholders.
According to Judge McCormick, she has recently received many letters from Tesla investors discussing the issue of this exorbitant legal fee.
She stated that she has not yet read these letters, and the ethical standards of the state judiciary prohibit her from considering the claims of non parties in the lawsuit, namely Tesla's other shareholders. She has requested both lawyers to propose the process for handling these letters.
Currently, Tesla shareholder Richard Tornetta and his representative lawyer Greg Varallo, who filed the lawsuit, have declined to comment. Musk's lawyers have not yet responded to this.
Letters from all over the world
One of the initiators of this "Tesla shareholder letter war", Alexandra Merz, has been calling on Tesla shareholders to write letters to McCormick on the X platform since March 4th, stating that tens of thousands of letters will flood the judge's office and that time is very tight.
She guided all Tesla shareholders to clearly state their passion for Tesla, the reasons for their investment, and explain the unreasonable legal fees in the Musk compensation case in their letters. She believes that paying Tesla stock to the plaintiff's lawyer is unimaginable and will cause great harm to minority shareholders.
Below its post, many Tesla minority shareholders are actively responding and have stated that they have sent a large number of registered letters to the Delaware District Court in the United States from Germany, the United Kingdom, Australia and other places.
Some people also argue that Musk should have received the initial compensation package, and those lawyers who demanded Tesla's stock as their $5.9 billion legal fee through this lawsuit are simply disrupting Tesla. These lawyers claim to be protecting Tesla shareholders, but in reality, it is entirely for their own selfish interests.
Others hope that the initiator of the action, Merz, can provide a template of the shareholder letter or issue a statement for collective signature. Many people have expressed that this verdict is not fair and hope that Tesla and Musk can continue to appeal.