The Great Assets
  • Business
  • World News
  • Politics
  • Investing
  • Business
  • World News
  • Politics
  • Investing

The Great Assets

Business

Tesla’s law firm drafts Delaware bill that could salvage Musk pay package

by admin February 20, 2025
February 20, 2025
Tesla’s law firm drafts Delaware bill that could salvage Musk pay package

A law firm that represents Tesla and Elon Musk has written proposed legislation that would alter Delaware corporate law, according to a person directly familiar with the drafting of the bill.

The proposed legislation, drafted by Richards, Layton & Finger, or RLF, would amend Delaware General Corporation Law, and if adopted, could pave the way for the reinstatement of Musk’s 2018 CEO pay package at Tesla, worth tens of billions of dollars in options.

RLF confirmed their involvement to CNBC.

“Statutory changes are necessary to restore the core principles that have been the hallmark of Delaware for over a century and ensure that Delaware remains the preeminent jurisdiction for incorporation,” Lisa Schmidt, president of RLF, said in a statement.

The bill was introduced in the Delaware General Assembly on Monday and would require approval by the state’s two chambers as well as Gov. Matt Meyer before it could become law.

The pay package Tesla granted to Musk in 2018 was the largest CEO compensation plan in public corporate history, but the Delaware Court of Chancery in early 2024 ordered it to be rescinded.

In her ruling, Chancellor Kathaleen McCormick wrote that the pay plan was inappropriately set by Tesla’s board, which was controlled by Musk, and that it was approved by shareholders who were misled by Tesla’s proxy materials before they were asked to vote on it.

Under the proposed legislation, Musk might no longer be considered a “controller” of Tesla, said Brian JM Quinn, a Boston College Law professor. Transactions that involve self-dealing with controllers or directors would be subject to less review than they are now, Quinn said. Those transactions range from going-private deals, to mergers and acquisitions, to board and executive compensation decisions.

“The real role of corporate law is to protect minority investors,” Quinn said. “With this bill, the legislature is saying, ‘Now, you know what? Protect them less.’”

The proposed legislation would also limit the kinds of documents that minority stakeholders are able to obtain through “books and records” inspection requests, Quinn said. Those stakeholders would be limited to formal items such as a certificate of incorporation or minutes of stockholder meetings but they’d lose access to informal communications such as emails or other messages between board members and executives, Quinn said. 

After the Court of Chancery’s ruling last year, Musk started a campaign to persuade companies not to incorporate in Delaware and moved the site of incorporation for his businesses out of the state. He has aimed his ire at McCormick with repeated and disparaging posts about her on X, his social network.

Other prominent executives, including Coinbase CEO Brian Armstrong and Bill Ackman of Pershing Square, have also criticized the Delaware judiciary. 

“Delaware has taken some heat for supposedly being too hard on controller transactions,” said Renee Zaytsev, partner at Boies Schiller and co-chair of the firm’s securities and shareholder dispute practice. 

“These amendments seem to be a course correction that would make it significantly easier for boards and controllers to avoid judicial scrutiny of their transactions,” she said.

Tesla and Musk did not respond to requests for comment.

This post appeared first on NBC NEWS

previous post
UN human rights chief accuses Rwanda-backed rebels in eastern DR Congo of killing and recruiting children
next post
Asara Raises $2.3M in Placement to Underpin Exploration Program at Kada and Makes Executive Changes

Related Posts

U.S. homebuilders raise alarm over tariffs as sentiment...

February 20, 2025

Why Chappell Roan and other artists find themselves...

February 9, 2025

Some tariff concessions from Canada and Mexico touted...

February 7, 2025

Southwest Airlines will charge to check bags for...

March 12, 2025

Joann to shutter all 800 fabric stores after...

February 26, 2025

Retirees ‘stunned’ as market turmoil over tariffs shrinks...

April 7, 2025

Amazon’s Zoox robotaxi unit issues software recall after...

May 7, 2025

UnitedHealthcare taps company veteran Tim Noel as new...

January 25, 2025

GM cuts 50% of Cruise staff after ending...

February 6, 2025

Disney tops quarterly profit estimates, but starts to...

February 6, 2025

    Join our mailing list to get access to special deals, promotions, and insider information. Your exclusive benefits await! Enjoy personalized recommendations, first dibs on sales, and members-only content that makes you feel like a true VIP. Sign up now and start saving!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Editors’ Picks

    • 1

      Top 11 Countries by Rare Earth Metal Production

      February 27, 2025
    • 2

      Capital One outage drags into Friday afternoon, leaving some customers without deposit access

      January 23, 2025
    • 3

      Altech Batteries LtdCERENERGY Accredited Highest Possible Green Rating

      January 24, 2025
    • 4

      Altech – CERENERGY Accredited Highest Possible Green Rating

      January 24, 2025
    • 5

      Bank of America CEO says financial industry will jump into crypto payments if regulators allow it

      January 23, 2025
    • 6

      Netflix shares soar as company reports surging revenue, tops 300 million subscribers

      January 23, 2025
    • 7

      Strategic Alliance with Macmahon to Accelerate Redevelopment of Nifty

      January 23, 2025
    • About us
    • Contacts
    • Privacy Policy
    • Terms and Conditions
    • Email Whitelisting

    Disclaimer: thegreatassets.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2025 thegreatassets.com | All Rights Reserved