Tesla has successfully reassured a Delaware judge that its attempted incorporation move to Texas won’t affect Elon Musk’s CEO compensation case.
In a new letter, Chancellor Kathaleen McCormick, the judge who canceled Elon Musk’s $55 billion compensation package after she concluded Tesla’s board misled investors, said that Tesla’s lawyers reassured her that the company won’t use its new shareholder vote on the compensation and incorporation move to Texas to circumvent the case.
The lawyers for the plaintiffs filed to accelerate the case, which is set for a hearing on July 8 to address the ridiculously high $6 billion legal fee they are asking for.
They were concerned that Tesla planned to use the votes on the incorporation move to Texas and the compensation package to avoid the judge’s decision in Delaware, which is basically the narrative that many Tesla shareholder influencers are pushing.
But Tesla’s own lawyers called that “rank speculation” and McCormick took them to their words:
If I have interpreted the defendants’ position incorrectly, then defense counsel – as officers of the court – are duty-bound to correct it. In the meantime, the defendants’ statements give me great comfort.
Shareholders have been voting for weeks, leading to the annual Tesla shareholders meeting on June 13.
As we previously reported, the company’s board launched a website and even started buying ads to push the vote in that direction.
The shareholder battle is heating up. We recently reported on a major pension fund that has announced that it will vote against it and encouraged other shareholders to do the same.
Earlier this week, we reported Glass Lewis going against the board’s recommendation.
Electrek’s Take
This is what I’ve been saying since the beginning. The fact that Tesla is not addressing any of the governance concerns, and instead pushing for a quick revote and move to Texas doesn’t solve the situation.
And now, the judge has painted Tesla in a corner.
Tesla has a legal obligation to follow through and respect the Delaware court’s jurisdiction – making those new votes a lot less meaningful.