Delaware throwing away its reputation as a reasonable, reliable, and above all predictable place for corporate law is an incredible own goal that more people should be talking about.
Shareholders brought a suit alleging Musk's pay package was inappropriate. It came out in the lawsuit that the people charged with negotiating with Musk were actually taking direction from him.
However you feel about that, I think it's easy to acknowledge that if the people negotiating on your behalf were being instructed by the counterparty, you probably didn't get the best deal you could. The court's decision was reasonable and probably would've been similar in any jurisdiction.
This exodus appears to me to be part petty feud and part cargo cult.
She appears to be ruling based on ideology instead of law.
The "passed the package again" tried to resurrect the original incentive payments, retroactively. That was disallowed.
And then the shareholders voted and it passed...?
Not the same shareholders. If the new vote had been on a new package, that would have been unambiguous.
The bottom line is Musk and Mark don’t want Boards. That’s honestly fine if everyone agrees ex ante those are the rules they’re playing by. Delaware law requires independent Boards. Sort of like a quorum requirement, the company can’t do certain things if it’s deficient in this respect. Texas law apparently doesn’t.
The only reason the pay package is so astronomical now is because the Tesla stock has risen astronomically in value. Which benefits the shareholders, no? This dilution in shareholder value is already factored into the rising price.
Not technically correct. Tesla is allowed to gift Elon everything it owns. The problem was Tesla didn’t follow the rules in how to do it such that the shareholders were ensured an honest negotiation between themselves and management. The Board was not independent, and the shareholders at the time of the grant didn’t approve it.
A later cohort signed off on it, but it was still backdated. The only downside to making a new grant are the tax implications.
Musk was just sloppy and greedy. He could have got it if he had acted within the law, but then he probably wouldn't have gotten as much.