Wall Street Wizardry
  • Business
  • World News
  • Politics
  • Investing
  • Business
  • World News
  • Politics
  • Investing

Wall Street Wizardry

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CEO compensation plan in public corporate history, but the Delaware Court of Chancery in early 2024 ordered it to be rescinded.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
How crazy popcorn buckets became big business for movie theaters
next post
Asara Raises $2.3M in Placement to Underpin Exploration Program at Kada and Makes Executive Changes

Related Posts

Why Chappell Roan and other artists find themselves...

February 9, 2025

With Trump digital coins, billions of dollars —...

January 23, 2025

Nvidia’s CEO did a Q&A with analysts. What...

March 23, 2025

FCC is investigating Disney and ABC for DEI...

March 29, 2025

Fox reveals plans to launch subscription streaming service...

February 6, 2025

Hertz says 2024 hack exposed some customers’ driver...

April 16, 2025

Treasury Dept. will not enforce ownership information reporting...

March 4, 2025

As Joann Fabrics and JCPenney announce store closings,...

February 18, 2025

McDonald’s announces plan to hire 375,000 employees this...

May 14, 2025

American Express CFO says spending picked up at...

January 26, 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

      Financial Agreement signed releasing $2M grant

      January 23, 2025
    • 2

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

      January 23, 2025
    • 3

      Trump re-designates Iranian-backed Houthis as terrorists: ‘Threaten[s] security of American civilians’

      January 23, 2025
    • 4

      US security contractor will take charge of key checkpoint in Gaza as Israeli forces withdraw

      January 25, 2025
    • 5

      Cyclopharm Signs US Agreement with HCA Healthcare for Technegas®

      January 23, 2025
    • 6

      FDA officially authorizes Zyn nicotine pouches for sale following health review

      January 23, 2025
    • 7

      Universal’s ‘Wicked: For Good’ creates a unique marketing challenge

      January 26, 2025
    • About us
    • Contacts
    • Privacy Policy
    • Terms and Conditions
    • Email Whitelisting

    Disclaimer: wallstreetwizardry.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 wallstreetwizardry.com | All Rights Reserved