Tesla is considering alternative ways to pay CEO Elon Musk amidst legal battles in Texas.
From Yahoo Finance: 2025-05-20 10:35:00
Tesla is considering alternative ways to pay CEO Elon Musk, with a potential new deal subject to Texas law instead of Delaware. The Delaware Supreme Court is set to decide on a $56 billion-plus performance-based deal invalidated by the Chancery Court, pending Musk and Tesla’s appeal. Tesla has reincorporated in Texas amid the legal battle. Other states are vying for Tesla’s business, challenging Delaware’s corporate-friendly laws. The outcome of Tesla’s board’s decision will shape corporate law. Texas may differ from Delaware on director independence standards. Musk’s ownership percentage could influence this decision and future corporate governance practices. Elon Musk’s compensation from Tesla may be renegotiated due to a lawsuit challenging the pay package. Potential new proposals include performance-based options or full value stock grants to avoid IRS restrictions on in-the-money options. A Delaware judge ruled Musk held too much influence over the board, leading to the invalidation of the deal. The new compensation committee, including Wilson-Thompson and Denholm, aims to create a plan that locks up CEO pay to incentivize long-term goals. Musk has threatened to step down if his pay is not renegotiated. Texas recently passed a law offering liability protection to officers and directors. Several high-profile companies, including Meta, Dropbox, Pershing Square Capital Management, Trade Desk, Fidelity National Financial, and Sonoma Pharmaceuticals, have all announced plans to move their incorporations. Additionally, Delaware has amended its corporation laws following significant business departures, providing more leeway to board members in transactions and making it harder for plaintiffs to find evidence supporting a lawsuit. The move has sparked concerns over the impact on corporate governance and trust in the US system. Meanwhile, Tesla has delayed the filing of its proxy statement, potentially giving more time to work out a backup pay plan for Elon Musk. Musk confirmed he plans to remain Tesla’s CEO but jokingly acknowledged the uncertainty of the future. 1. The stock market saw a significant increase today, with the S&P 500 reaching a new all-time high. The Dow Jones Industrial Average also saw gains, closing up over 200 points. This surge was fueled by positive economic data and strong corporate earnings reports.
2. In international news, tensions between the US and China continue to escalate as the US Navy conducted a freedom of navigation operation in the South China Sea. This move comes amidst ongoing disputes over territorial claims in the region.
3. On the health front, a new study revealed that the Pfizer-BioNTech COVID-19 vaccine is 95% effective in preventing infection after two doses. This data provides further reassurance about the vaccine’s efficacy in combating the virus.
4. In sports news, the NBA announced plans to hold an All-Star Game in Atlanta on March 7th. This decision has sparked controversy among players and fans, as concerns about COVID-19 transmission remain high.
5. Lastly, Tesla reported record profits in the fourth quarter of 2020, with earnings exceeding expectations. The electric car company’s stock price surged in response to the news, reaching a new high. This success comes as Tesla continues to dominate the electric vehicle market.
Read more at Yahoo Finance: Tesla’s Texas Plan B if Delaware won’t reinstate Elon Musk’s pay. It’s not about the money, says Elon.