Tesla, Inc. is facing a significant legal challenge after the Delaware Chancery Court struck down CEO Elon Musk's 2018 pay package. The package, which was contingent on the company hitting certain targets, could have awarded Musk with 1% tranches of options over 12 tranches. The court's decision, described as 'unfathomable' by critics, questions the necessity of such a package for Musk's retention and the achievement of Tesla's goals. The ruling has sparked a debate over the predictability of Delaware's corporate law, a factor that has historically attracted companies to incorporate in the state. In response, Musk has indicated plans to move Tesla's incorporation to Texas, a move that could trigger a trend among other companies. The case...Show More

Tesla, Inc. is facing a significant legal challenge after the Delaware Chancery Court struck down CEO Elon Musk's 2018 pay package. The package, which was contingent on the company hitting certain targets, could have awarded Musk with 1% tranches of options over 12 tranches. The court's decision, described as 'unfathomable' by critics, questions the necessity of such a package for Musk's retention and the achievement of Tesla's goals. The ruling has sparked a debate over the predictability of Delaware's corporate law, a factor that has historically attracted companies to incorporate in the state. In response, Musk has indicated plans to move Tesla's incorporation to Texas, a move that could trigger a trend among other companies. The case is expected to be appealed to the Delaware Supreme Court. Meanwhile, Tesla has filed a definitive proxy statement with the SEC regarding its 2024 annual meeting, urging shareholders to read the materials related to the meeting, which include the proposed redomestication of Tesla from Delaware to Texas and the ratification of the 2018 CEO pay package.