Tesla CEO Elon Musk is fighting back after a Delaware judge with ties to President Joe Biden ordered the company to pay $345 million in legal fees over a shareholder dispute. The ruling, equating to $18,000 per hour for the plaintiff’s attorneys, followed a lawsuit challenging Musk’s compensation package, which had been overwhelmingly approved by Tesla shareholders.
In a controversial decision, Chancellor Kathaleen St. Jude McCormick overturned the compensation plan, claiming Tesla shareholders lacked adequate information to vote and that the board was not independent. The package had been approved by 77% of shareholders in June 2024, following two separate votes.
McCormick awarded the extraordinary legal fees, citing the complexity of the case and the quality of Tesla’s legal defense. “Plaintiff faced some of the best law firms in the country,” she stated, justifying the $345 million payout to plaintiffs’ attorneys.
Tesla has vowed to appeal, calling the ruling an affront to shareholder rights. “This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners — the shareholders,” Tesla stated in a post on X.
McCormick’s connections to Biden have raised additional concerns. Her former firm, Young Conaway, donated $55,000 to Biden’s campaign in 2008, and emails suggest her nomination to the Delaware Chancery Court was supported by Biden allies. Critics argue her ruling reflects a broader effort to undermine Musk, whose companies have faced significant government pressure under the Biden administration.
The Biden administration’s Department of Justice and FCC have both taken steps targeting Musk, leading critics to question whether the ruling is politically motivated. Musk remains one of the most prominent business leaders voicing dissent against the administration’s policies.
