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Tesla shareholder’s legal team adjusts demand to $1.44 billion in fees for Musk pay case

Credit: Tesla China

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2 years ago

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The legal team of Tesla shareholder Richard Tornetta, who filed a legal complaint against Elon Musk’s 2018 CEO Performance Award, has adjusted their plaintiff fee request to the Delaware Court. Tornetta’s legal team noted that they could adjust their proposed fee to just $73,948 per hour, which would amount to a cash award of roughly $1.44 billion.

The Tornetta vs. Musk case became a notable issue for the electric vehicle maker back in January when Judge Kathaleen McCormick of the Delaware Court of Chancery rescinded Musk’s 2018 CEO Performance Award. For their work in the case, Tornetta’s legal team argued that they should be granted 29.4 million TSLA shares. Such an amount would be worth over $5 billion, or more than $200,000 per hour. 

Tesla has argued against Tornetta’s legal team’s arguments. As noted in a Reuters report, the electric vehicle maker argued that the legal team of the Tesla shareholder — who held nine shares when he filed his complaint against Musk’s 2018 pay package — should be paid just about $13.6 million for their work. Longtime Tesla retail shareholder Amy Steffens has also secured legal counsel to challenge the $200,000 per hour fee request of Tornetta’s attorneys. 

In their recent filing, Tornetta’s legal team proposed an alternative way of looking at the fees for their work in the case. While the legal team rejected Tesla’s $13.6 million legal fee argument, and while the attorneys still argued that the court should strongly consider granting them over 29 million TSLA shares as payment, they noted that the Court could go for a cash-based alternative structure instead. Such a system would lower their hourly rate to $73,948, and would result in a payment of around $1.44 billion. 

Following are sections of the filing from Tornetta’s lawyers. 

“While Plaintiff’s Counsel sincerely believe the award sought is appropriate, earned, and indeed conservative under Delaware law—the Action did, after all, rescind an ‘unfathomable’ $55B compensation package, the largest in history by multiples—Plaintiff’s Counsel acknowledge the requested award, if granted, would be record-setting and the subject of significant commentary. Were the Court concerned by the requested award’s size and desirous of a different approach, there are other alternatives available that address the expressed concerns about “windfalls.”

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“Specifically, $35,000/hour cannot be a ‘windfall’ because that hourly rate was awarded by this Court and affirmed by the Supreme Court over a decade ago in Southern Peru. Adjusted to today’s dollars, a $35,000 hourly rate would be over $55,600/hour. It follows, a fortiori, that for a substantial verdict on the order of Southern Peru, an award of at least $55,600/hour is not a ‘windfall.’ 

“Indeed, even Tesla argues that this Action created compensable value equal to its calculation of the Grant’s $2.3B GDFV. But even using this low-end value estimate, the benefit Plaintiff achieved here was significantly higher than the $1.347B (pre-interest) Southern Peru benefit. Thus, a low-end cash award of roughly $1.0842B could be fashioned based solely on the affirmed, inflation-adjusted Southern Peru numbers.

“But any such award would be unfairly low for two reasons. First, as noted in Plaintiff’s Opening Brief, this Court in Southern Peru—after admonishing plaintiff’s counsel to seek a conservative fee given ‘the reality [that] their own delays affected the remedy awarded’—further reduced that request by one-third as a penalty for counsel taking so long to prosecute the case that rescission was impossible. Second, the ~$51B benefit achieved here is approximately 38x higher than the benefit achieved in Southern Peru. 

“Adjusting for the one-third penalty assessed in Southern Peru—which was applied to an already conservative 22.5% request by that plaintiff—brings the inflation-adjusted lodestar to $73,948/hour, which yields a fee of approximately $1.44B. Adjusting further to reflect the much higher result here is a matter of the Court’s discretion Plaintiff’s Counsel would submit that exercising the Court’s discretion to award a cash fee of roughly twice the inflation-adjusted Southern Peru hourly rate after reversing for the discount appropriately reflects the substantially greater benefit achieved here,” Tornetta’s lawyers wrote. 

The fling from Tornetta’s lawyers can be viewed below (via Plainsite). 

gov.uscourts.delch.2018-0408-KSJM.387.0 by Simon Alvarez on Scribd

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Elon Musk

Elon Musk and Trump are closer than ever, and Tesla could be the big winner

Elon Musk sat beside Trump as AI leaders signed a voluntary White House safety accord.

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22 hours ago

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September 29, 2026

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Elon Musk had the seat right next to President Donald Trump on Tuesday as the White House hosted the leaders of America’s biggest artificial intelligence companies for a lunch that ended with a voluntary industry accord on AI safety.

A seating chart Trump posted on Truth Social placed Musk at the president’s left in the East Room, with Nvidia CEO Jensen Huang on his right, according to an Associated Press reporter. Anthropic CEO Dario Amodei, OpenAI President Greg Brockman, Meta’s Mark Zuckerberg, Google’s Sundar Pichai, Microsoft’s Satya Nadella and Amazon founder Jeff Bezos also attended, along with Vice President JD Vance and House Speaker Mike Johnson.

After the lunch, Trump told reporters outside the West Wing that the executives had signed “The White House Accord on Superintelligence: A Joint Commitment on Frontier SI Responsibilities.” Johnson described it as a voluntary statement of principles built on “robust internal controls and layers of internal and external review,” while Zuckerberg said company boards would independently review reports from outside auditors. Trump called the document “morally binding,” said he would name a new AI czar within days, and signed an executive order formally renaming artificial intelligence “super intelligence,” CNBC reported.

Musk was not in the room for Tesla alone. Since SpaceX absorbed xAI, he runs the company behind Grok and one of the largest AI training operations anywhere. On September 25, he said another 220,000 Nvidia GB300 chips would come online at Colossus 2 within a week, with more expected in November and December.

SpaceX confirms third massive compute deal at Colossus data center

 

Musk also used the trip to restate his energy ambitions. “SpaceX is aiming together with Tesla to do 200 gigawatts of solar production per year,” he said at an event in Washington. It is the same combined target he laid out that feeds directly into Terafab, the Tesla and SpaceX chip venture that will need enormous amounts of power.

The showing between Musk and Trump has come a long way, since the two had the very public split in mid 2025 after Musk opposed the “Big Beautiful Bill” and left DOGE. They reconciled at Charlie Kirk’s memorial that September, and Trump later called their relationship “good”. Since then, Musk has joined Trump’s China delegation in May and attended last week’s White House state dinner for Chinese President Xi Jinping.

For Tesla, that access to government official could pay dividends. As Teslarati noted in January, federal autonomy rules, NHTSA oversight and a single national standard for driverless vehicles all run through an administration Musk can more easily reach directly as Tesla works to scale Robotaxi and Cybercab beyond Texas.

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Investor's Corner

Tesla showrooms picked clean ahead of Q3 end as demand looks strong

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2 days ago

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September 29, 2026

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Credit: @thaichiminh1907/X

Tesla (NASDAQ: TSLA) showrooms have been picked clean ahead of the end of the third quarter of the year, as demand looks to be strong and delivery estimates for new vehicles are pushed into late 2026 and early 2027.

Tesla appears to have sold out of many of its Model 3 and Model Y trim levels in the United States, as only the Model Y RWD and Model Y All-Wheel-Drive are available for delivery before the end of the year.

Additionally, many showrooms are either completely empty or void of all but just one demo unit within the buildings themselves in an effort to bolster what could be one of Tesla’s best quarters in vehicle deliveries in recent memory.

Additionally, when I spoke to the guys at Tesla Mechanicsburg two weeks ago, when I returned the Model Y L, their third hauler of the week had just arrived, and every vehicle on it, along with every vehicle in their delivery lot, was accounted for and had a name attached to it for delivery.

Tesla saw a 25 percent increase in deliveries in Q2 compared to the same quarter the year before. The vast majority of the 480,126 units it delivered, 467,762 vehicles to be exact, were the Model 3 and Model Y.

In Q3 2025, Tesla delivered 497,099 vehicles, once again a figure that was dominated by the company’s two mass-market vehicles. Analysts have unusually wide predictions for this quarter, likely because so many firms missed the Q2 delivery figure by such a substantial margin; Wall Street predicted 408,000 cars, while Tesla delivered 480,000.

Goldman Sachs has Tesla slotted for 435,000 deliveries in Q3, while JPMorgan said it anticipates 482,000. The median guess is about 449,000 deliveries for Q3.

Interested in ordering a Tesla? Use my referral code for three free months of Full Self-Driving (Supervised) here.

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Elon Musk

SpaceX turned a heralding moment for Starship into its greatest

Starship reached orbit despite losing an engine, deployed 26 Starlink V3 satellites on Flight 14.

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2 days ago

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September 28, 2026

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SpaceX’s Starship reached orbit for the first time on Monday, and for a few nail-biting minutes it looked like it wouldn’t. During ascent on Flight 14, one of Ship 41’s six Raptor engines shut down early, and SpaceX’s livestream host Dan Huot told viewers the team had decided not to commit to orbit. Minutes later, after what Huot described as a lot of conversation in the control room, the final poll came back in favor, and a roughly 19 second burn of a single Raptor pushed the ship into orbit about 170 miles up.

The reversal matters because SpaceX had written the exit ramp into the mission plan. The company said it would only fire the orbital insertion burn if flight controllers confirmed enough backup hardware remained for the deorbit burn, a condition Teslarati laid out ahead of the flight. Losing an engine was exactly the scenario that rule was built for.

Pressing forward fits Elon Musk’s history. Falcon 1 failed three straight times before its fourth launch reached orbit in 2008, with SpaceX nearly out of money, and Starship was developed by flying prototypes until they broke. What changed this year SpaceX going public, and with $SPCX sliding below its IPO price in July when Flight 13 slipped, the short interest climbed significantly, as Teslarati reported at the time. A Starship potentially lost today with revenue generating next-gen Starlink satellites aboard would have landed directly on shareholders.

That pressure showed up after orbit. SpaceX cut a flight planned to last nearly 10 hours to about three, moving splashdown from west of Chile to the North Pacific near Hawaii. SpaceX gave no reason, though Musk said this month the company was being extremely cautious about debris risk. The single Raptor for deorbit worked, and Ship 41 completed its flip and landing burn before breaking apart in the water, an outcome SpaceX expected. Musk has structured SpaceX’s governance to shield long term bets from market pressure.

The payload is the bigger business story. Musk posted that all 26 Starlink V3 satellites deployed and are “operating nominally.” Each V3 is rated for about 1 Tbps of downlink and 160 Gbps of uplink, so this single launch adds roughly 26 Tbps, about 10 times what a Falcon 9 load of V2 Mini satellites adds. The V3 is too large for Falcon 9, making Starship the only vehicle that can build out the planned 100,000 satellite constellation, at up to 60 per flight once it reaches routine service. Unlike the 20 V3 units on Flight 13, which reentered on a suborbital path, these will raise their orbits and could begin serving customers within weeks and bring in hundreds of millions of additional dollars in projected Starlink revenue.

SpaceX has already begun winding down Falcon 9 Starlink launches from Florida in favor of Starship. Reported targets put Flight 15 as early as October 19, leaving about three weeks to diagnose Monday’s engine shutdown before the next orbital attempt.

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