Analyst: After Tesla shareholder vote, Musk still faces legal hurdles to clinch a $56B pay package

Record ID: 1822989

  • Title: Analyst: After Tesla shareholder vote, Musk still faces legal hurdles to clinch a $56B pay package
  • Date: 13th June 2024
  • Summary: BOSTON, MASSACHUSETTS, UNITED STATES (JUNE 13, 2024) (REUTERS) (SOUNDBITE) (English) BOSTON COLLEGE LAW SCHOOL PROFESSOR, BRIAN QUINN, SAYING: "I mean, if she [Delaware Chancery Judge Kathaleen MCormick] - if she's convinced that, oh, yes, this was a free and uncoerced vote of the stockholders, and they have full information when they voted to approve, she might say, ‘Geez
  • Embargoed: 27th June 2024 22:15
  • Keywords: Elon Musk Judge McCornick Pay Shareholders Tesla Vote
  • Location: GRUENHEIDE & BERLIN, GERMANY / INTERNET / BOSTON, MASSACHUSETTS, & LOS ANGELES, CALIFORNIA, UNITED STATES /SHANGHAI, CHINA
  • City: GRUENHEIDE & BERLIN, GERMANY / INTERNET / BOSTON, MASSACHUSETTS, & LOS ANGELES, CALIFORNIA, UNITED STATES /SHANGHAI, CHINA
  • Country: US
  • Topics: Company News Markets,Economic Events,North America
  • Reuters ID: LVA00E056913062024RP1
  • Aspect Ratio: 16:9
  • Story Text: Tesla on Thursday (June 13) convinced an army of small investors and major funds to ratify Elon Musk's $56 billion pay package. Now comes the harder part: persuading an already skeptical Delaware judge to recognize it.
    The company said Thursday that shareholders had approved both Musk's pay package and a board-sponsored move of Tesla's legal home to Texas from Delaware.
    Musk is the driving force of Tesla and responsible for many of its advances, leading to vocal support for the pay package especially among small shareholders. Still, sales and stock price have fallen recently, adding to concerns that produced a concerted 'no' vote.
    Before Tesla can give the shares to Musk, there will likely be months of litigation over the pay ratification vote, Musk's efforts to rally shareholders in support of his compensation and the appeal of the original ruling, four months after a Delaware judge voided the pay package.
    A final legal result in Musk's favor is not certain and will not be quick.
    Judge Kathaleen McCormick of Delaware's Court of Chancery rescinded the pay package in January because she found that Musk improperly controlled the 2018 board process to negotiate it. She also ruled that Tesla failed to fully inform investors before they voted for it.
    "This thing is not over," said Brian Quinn, professor at Boston College Law School. He said McCormick will require Tesla to prove the vote was uncoerced, and the timing and strategy were not influenced by Musk.
    (Production- Tom Rowe)
  • Copyright Holder: FILE REUTERS (CAN SELL)
  • Copyright Notice: (c) Copyright Thomson Reuters 2024. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register