According to the latest court documents obtained by the WiseFinance app, Tesla (TSLA.US) proposes that the legal team revoking Elon Musk's record compensation plan should only receive a small portion of the $5.6 billion legal fees they requested. Tesla believes that Richard Tonnetta's legal team should receive at least $13.6 million in compensation, which is far less than what they seek, as the lawsuit has brought little tangible benefits to the company.

Tonetta, one of the shareholders, whose lawsuit successfully led to the cancellation of Musk's $56 billion compensation plan in January. It is understood that Musk's compensation plan is the highest in the US corporate world, with no salary or cash bonuses, but rewards are based on Tesla's market cap from 2018 to the next 10 years reaching $650 billion.

Tesla further pointed out that if shareholders vote against the compensation plan at the upcoming annual meeting, the main value of the lawsuit is to reveal the flaws in the compensation negotiation process, allowing shareholders to have the opportunity to correct the problem through a new vote.

Tesla emphasized in documents submitted to the Delaware Court of Chancery that "market evidence indisputably shows that plaintiffs have brought little to no value to Tesla or its stockholders, far less than the amount they seek."

The legal team of the shareholders is composed of three well-known law firms, including Bernstein Litowitz Berger & Grossmann in New York, Friedman Oster & Tejtel, and Andrews & Springer in Wilmington, Delaware.

While Tesla is working to restore support from shareholders for Musk's compensation plan, shareholders have questioned the amount of legal fees.

Tesla also requested that shareholders approve the company's move from its legally registered home in Delaware to Texas, which was proposed after Musk sharply criticized Delaware's compensation ruling.

In January, Judge Kathleen McCormick of the Delaware Court of Chancery revoked the compensation agreement in 2018, citing Musk's improper influence on Tesla's board of directors' compensation negotiations. The legal team that filed the lawsuit is now seeking an order from McCormick to require Tesla to pay about 29 million Tesla shares as legal fees, part of which is based on Musk's return of 266 million shares to Tesla due to the cancellation of the compensation plan.

Tesla rebutted that since Musk had never exercised any stock options (which is the form of his compensation), the ruling did not result in Tesla returning any stock. Currently, hundreds of Tesla shareholders have expressed opposition to the legal fee request in letters to the company or the court.

Among them, Amy Stevens, who holds 19,000 Tesla shares, has formally objected to the legal fee request and is represented by the law firm Munger Tolles & Olson. This incident highlights the difference between shareholders and the company on legal fees and shareholders' concern about corporate governance and compensation decision-making processes.

It is worth mentioning that Marcie Frost, CEO of the California Public Employees' Retirement System (CalPERS), announced in the report earlier that the institution plans to oppose Tesla CEO Musk's $56 billion compensation plan. "We believe that compensation is not commensurate with company performance," Frost said. As one of the top 30 investors in Tesla, CalPERS holds 9.5 million Tesla shares but has not responded to requests for comment.

Editor/Emily