That’s why shareholders like the Delaware courts {{ LOL }}
{{ The judge said she would not reverse her decision to strike down the compensation package after Tesla shareholders approved Mr. Musk’s pay a second time. }}
intercst
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Elon got Doged. 
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Guess he’s gonna have to leave MarALago and get a day job.
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Nah. Just reregister Tesla in a state with a more pliable court. Doesn’t matter how much that move would cost Tesla. It’s all about Musk.
Steve
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Done, also approved by we, the shareholders.
The Captain
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Incredible what hoops superstar-job creators have to jump through to mitigate piddly ‚checks and balances‘; after all their powers as well as pay checks shall be limitless and go unquestioned.
Fortunately, soon he will wield the might to nix all those pesky regulations his companies might have run afoul of.
</ cynicism>
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He’s already filed to domicile Tesla in Texas. I assume you’ll need to have a shareholder vote to ratify it.
intercst
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I recall voting for both the pay package and getting out of Delaware.
The Captain
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Obviously, if the Delaware court still holds sway, that hasn’t been properly ratified yet. Maybe you need a 2/3 majority to change domicile? The whole reason most corporations are domiciled in Delaware is because you can count on them to follow the law (as Elon learned with his Twitter investment.)
I’d want some compensation if you were forcing me to accept a lower quality domicile like Texas. {{ LOL }}
intercst
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Jim Jones got hundreds of his followers to line up and drink poison. I’m sure Musk cult members will approve anything he wants.
Steve
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Horrible, the burdens the Commies put on those “hard working JCs” that live in abject poverty on 8 figure paydays.
Steve
Changing the state of domicile of the corporation after the judgment wouldn’t necessarily divest the Delaware court of jurisdiction over the case. And the court appears to have ruled that a post-judgment ratification of the award doesn’t undo the judgment. IOW, if there’s an error in the process by which a corporate action is taken, you can’t cure that error after you’ve lost the lawsuit.
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Change domicile.
Then make a new award.
The cult approves.
QED
Steve
WSJ has an article today explaining Tesla situation. Says that Texas has set up a new “Business Court” to better handle the claims of the wealthy and connected, {{ LOL }}
{{ If an appeal fails, board directors could craft a fresh compensation package for Musk subject to laws in Texas, Tesla’s new legal home. Shareholders voted to move its incorporation from Delaware to the southern state in June, at the same time they ratified Musk’s pay package for the second time. Any future legal disputes over his compensation would then go through Texas’ new business court, which started hearing cases for the first time in September.
Obviously at some point you should be able to charge corporate domiciles and then be governed by the laws of the new domicile. Or is Delaware like Medicare Advantage, where you can sign up, but never out?
intercst
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There are 50 states. Which law do they follow? Only Delaware is legal? Or is Delaware the home of a specific interest group that hates outsiders?
That is your right but you don’t speak for me or for the majority of Tesla shareholders who voted for the pay package and Texas.
The Captain
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The 50 states have varying capacities and quality. Delaware is the domicile of choice for 68% of the Fortune 500
{{ Nearly 68.2% of Fortune 500 companies are domiciled in Delaware. Delaware is a popular choice for incorporation because of its:
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Business-friendly laws: Delaware’s General Corporation Law is considered to be the most advanced and flexible in the country.
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Court of Chancery: Delaware has a unique court system that specializes in corporate cases.
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Efficient filing process: Delaware has a streamlined process for filing.
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Investor preference: Many investors, including venture capital firms and angel investors, prefer that startups incorporate in Delaware.
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Familiarity: Delaware law is familiar to many companies, investors, and attorneys.
Delaware is also the most common state for foreign businesses to incorporate in. In 2022, 79% of U.S. initial public offerings were registered in Delaware. }}
intercst
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And this gives the judge the right to overthrow the vote of a supermajority of investors?
I would not want my business run by a judge.
BTW, the switch to Texas obtained the required supermajority vote. Tesla is free of Delaware. Good riddance.
The Captain
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You voted for it, but according to the judge, information you were provided and which was underlying that vote was insufficient. That is a completely separate question. It’s not that Delaware courts don’t want Musk to get paid, they don’t want him to get away with deceptive disclosure practices. As a shareholder, that is also not something you want to promote.
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LongTimeNoSee!
The initial ruling has some merit as you point out, the court defending shareholder rights. After that ruling the pay package was voted on again, now with full disclosure of the whole affair. The shareholders approved the pay package again even if at face value it diluted their shares. The “deceptive disclosure practices” argument is null and void after such a public disclosure.
As a small shareholder my remedy is to avoid the shares of crappy companies.
The Captain
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However, this case was about the original vote and legal decision. From the current ruling:
This court has allowed a party to raise an affirmative defense based on a stockholder vote that occurred during litigation. But no court has ever allowed a party to deploy stockholder ratification as a defense after the close of fact finding, with one possible exception…
No Delaware decision, including Kerbs, has ever allowed a party to raise the defense of stockholder ratification after trial for the purpose of persuading the court to alter (much less flip) its judgment. Defendants raised the Stockholder Vote defense six years after this action was filed, one and a half years after trial, and five months after the Post-Trial Opinion. Wherever the outer boundary of non-prejudicial delay lies, Defendants crossed it. The court declines to exercise its discretion to permit Defendants to raise the defense of stockholder ratification at this late stage.
https://courts.delaware.gov/Opinions/Download.aspx?id=372420
DB2
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