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Delaware court voids Musk's 2018 Tesla pay package; Musk tells companies never to incorporate in Delaware
Never incorporate your company in the state of Delaware
What he said or did
After Chancellor Kathaleen McCormick voided his 2018 Tesla pay package, Musk posted Never incorporate your company in the state of Delaware
and polled followers on moving Tesla's incorporation to Texas. On 1 February he wrote that companies should leave Delaware before they lock the doors.
Background
The ruling in a 2018 shareholder suit brought by Richard Tornetta found Tesla's board deferred to Musk, who wielded the maximum influence that a manager can wield over a company
(Fortune). The package was valued at about $56 billion.
Official response
Legal scholars quoted by The Philadelphia Inquirer disputed Musk's framing; Tulane law professor Ann Lipton said his losses would not have happened had Tesla followed basic corporate-governance formalities.
What happened next
Musk said he would ask Tesla shareholders to approve reincorporating in Texas (Philadelphia Inquirer). See the December 2024 entry for later rulings.
Sources
- Fortune31 Jan 2024
- The Philadelphia Inquirer6 Feb 2024
This entry records what was publicly said or done, as reported by the sources above. Quotes are attributed to the person who made them.
