The Delaware Chancery Court made waves with its January ruling denying Tesla Inc’s board approval of Elon Musk’s $55 billion executive compensation plan. Judge Kathaleen S McCormick rescinded Musk’s “historically unprecedented” compensation plan, leading Musk to take steps to ditch Delaware in favor of Texas as Tesla’s state of incorporation.
The ruling in Tornetta v. Musk and the details swirling around it cloud an important corporate governance development arising from the case. The Delaware court set a new course by evaluating the Tesla board’s independence with a heightened level of judicial review and an expanded approach ...
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