The drama surrounding Tesla’s annual shareholder meeting has been nothing short of intense. One of the key items on the agenda is the vote on Elon Musk’s controversial $56 billion compensation package, which was previously invalidated by a Delaware Chancery Court judge earlier this year. In addition to that, there will also be a vote on whether the company should change its location of incorporation from Delaware to Texas.
Tesla’s most ardent supporters, known as the “retail army” of shareholders, are urging fellow shareholders to vote in favor of both proposals, with particular emphasis on Musk’s compensation package. However, it remains unclear what impact the outcome of these votes will have. Nevertheless, Tesla executives and employees, some of whom are not active on social media, are passionately imploring people to cast their votes.
While the discussions and calls to action have largely centered around the argument that Musk deserves his compensation because he met the agreed-upon targets, there is a significant aspect that is being overlooked. Chancellor Kathaleen McCormick’s ruling in January highlighted a crucial point: Musk wields such immense influence over Tesla and its board of directors that there was no real negotiation when the compensation package was initially formulated in 2017-2018.
Unfortunately, this important aspect seems to have been overshadowed by accusations from Tesla supporters, labeling McCormick as a “radical activist judge.” However, as one delves into her examination of the case’s evidence, these accusations quickly lose their credibility.
For those interested in gaining a deeper understanding of the ruling, McCormick’s 201-page opinion can be found below. It is a comprehensive but accessible read that is worth revisiting ahead of the upcoming vote. At the very least, it serves as a prelude to the legal battles that are likely to ensue after Thursday’s decision.
[Embed Scribd document here: Tornetta v. Musk Post-Trial Opinion by Sean O’Kane]