Tesla Board Vows Not to Move Musk Pay Court Fight to Texas

Tesla Inc.’s directors say they don’t want a do-over in Texas of the Delaware court battle that killed co-founder Elon Musk’s $56 billion pay package — regardless of whether shareholders approve reincorporating the electric-car maker in the Lone Star state.

Bloomberg
First Published9 May 2024
Tesla Board Vows Not to Move Musk Pay Court Fight to Texas
Tesla Board Vows Not to Move Musk Pay Court Fight to Texas

Tesla Inc.’s directors say they don’t want a do-over in Texas of the Delaware court battle that killed co-founder Elon Musk’s $56 billion pay package — regardless of whether shareholders approve reincorporating the electric-car maker in the Lone Star state.

Lawyers for Tesla’s board say an investor who persuaded a Delaware judge to void Musk’s record-setting pay package is raising “hypothetical” fears about a June proxy vote on whether the company should ditch Delaware and reinstate Musk’s compensation plan.

Tesla directors “have not threatened, and do not intend, to seek to litigate any issue relating to this action in any other forum,” the board’s lawyers said in a Delaware Chancery Court filing made public Wednesday. The company made similar arguments in an April filing.

Read More: Tesla Pushes Back on Investor’s Latest Move in Musk Pay Row

Musk called for Tesla to move its corporate home to Texas after Delaware Chancery Judge Kathaleen St. J. McCormick in January rescinded his pay package over director conflicts of interest and the company’s failure to properly disclose the plan’s details. 

Richard Tornetta, the shareholder who won the ruling after a 2022 trial, wants the judge to issue an order ahead of the June 13 annual shareholder meeting barring Tesla from litigating the pay issue anywhere other than the First State. 

Greg Varallo, a lawyer representing Tornetta, declined to comment Wednesday. It’s unclear what impact an order from McCormick retaining the dispute in Delaware would have on the case. If Tesla reincorporates in Texas and its board approves Musk’s pay there, an investor would have to challenge it with a new lawsuit under Texas law.

McCormick has set a July 8 hearing to issue a final order in the case and review a request by Tornetta’s lawyers to paid for their work with 29 million Tesla shares — currently worth about $5 billion. 

Tesla’s directors argued in this week’s filing that the proxy vote is being held under Delaware law and any fears about further litigation are speculative. 

The case is Tornetta v. Musk, 2018-0408, Delaware Chancery Court .

This article was generated from an automated news agency feed without modifications to text.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
HomeNewsworldTesla Board Vows Not to Move Musk Pay Court Fight to Texas

Most Active Stocks

Bharat Electronics

291.55
08:15 AM | 13 JUN 2024
1 (0.34%)

Tata Steel

181.90
08:15 AM | 13 JUN 2024
-0.35 (-0.19%)

GAIL India

216.90
08:15 AM | 13 JUN 2024
-0.05 (-0.02%)

Zee Entertainment Enterprises

165.05
08:13 AM | 13 JUN 2024
-1.8 (-1.08%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Oracle Financial Services Softwa

9,549.95
08:14 AM | 13 JUN 2024
808.15 (9.24%)

Home First Finance Company India

1,045.00
08:14 AM | 13 JUN 2024
78.7 (8.14%)

Archean Chemical Industries

667.85
08:14 AM | 13 JUN 2024
45.85 (7.37%)

Elgi Equipments

646.90
08:13 AM | 13 JUN 2024
43.15 (7.15%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    73,441.00-219.00
    Chennai
    73,370.00139.00
    Delhi
    73,155.00353.00
    Kolkata
    72,797.00-577.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    99.84/L0.00
    Chennai
    100.75/L0.00
    Kolkata
    103.94/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumInstant LoanGet App