Pension Funds Lead in Corporate Cases, Enhancing Big Fee Demands

A lone investor with just nine shares in Tesla Inc. led the fight over Elon Musk’s $56 billion pay package, but high-stakes cases at the Delaware Chancery Court are far more likely to be brought by those with much larger investments: pension funds.

Labor union and state or municipal pension funds are common plaintiffs in shareholder disputes with big name companies, including Tesla and Dell, because they hold large tranches of stock and are savvy enough to take on complex litigation.

“Pension funds are more likely to be clients because they are easily identifiable, sophisticated investors that the plaintiff’s ...