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...The Delaware court this year invalidated such a practice at the investment bank Moelis & Co, which had given its founder veto power over nearly all of the standard work conducted by a board of directors....
...Delaware has been accused in the past of being over-friendly to boards; it now faces a fresh judicial challenge. The US tradition of legal competition among states is distinctive....
...Elon Musk’s $55bn pay package from Tesla has been voided by a Delaware judge, who ruled that the unprecedented compensation was improperly approved by the automaker’s board of directors and had short-changed...
...— had made Delaware’s corporate law court too unpredictable for dealmaking undertaken by their boards-of-director clients....
...Tesla has asked its shareholders to approve moving its state of incorporation from Delaware to Texas, fulfilling chief executive Elon Musk’s promise in February after a Delaware court voided his $56bn pay...
...A few of which the FT has written about including “advance notice bylaws”, and contracts struck by boards that nullify the application of director independence....
...Sujeet Indap Delaware generally lets boards of directors and CEOs run companies how they see fit, and they don’t second-guess most decisions....
...His law firm, Wachtell Lipton Rosen & Katz, later dominated the practice of representing corporate boards in Delaware disputes, even hiring multiple Delaware judges after they retired from the bench....
...One vice-chancellor of the Delaware Court of Chancery, perhaps surprisingly, welcomed the competition when asked by the Financial Times, citing how much work he had....
...Robyn Denholm, chair of Tesla’s board, wrote to shareholders on Wednesday asking them to approve the move to Texas and to ratify Musk’s pay package, which they previously approved at a meeting in 2018....
...McCormick ruled that Musk had exerted undue control over the company’s board despite owning a minority of Tesla. He was the “paradigmatic ‘Superstar CEO’”, she wrote in the ruling....
...The bigger picture is that Delaware chancery courts are there to make sure company boards and management are behaving appropriately....
...In this week’s ruling in Delaware, McCormick said Musk’s record-breaking $56bn remuneration package had been improperly approved by the company’s board and had short-changed shareholders....
...It is extraordinary,” Charles Elson, a governance expert at the University of Delaware, told me this week....
...The state tends to be more deferential to the decisions of boards with such large shareholders. TripAdvisor, controlled by Greg Maffei, recently has attempted to move from Delaware to Nevada....
...The original 2018 share incentive package — worth $56bn — was struck down by a Delaware court because, it deemed, Tesla’s board was not sufficiently independent to verify it....
...That was the position taken by Delaware chancery court judge Kathaleen McCormick, who noted that Elon Musk’s remuneration was 250 times the relevant benchmark for chief executives....
...“The affairs of Delaware corporations, however, must be managed by Boards of Directors, not backroom deals,” said the lawsuit, saying non-Elliott shareholders never got the opportunity to approve the features...
...McCormick ruled the Tesla board was insufficiently independent of Musk, and that the governance process leading to the grant as well as the value of the shares had been “unfair” to other shareholders....
...Its case was serendipitously boosted by a recent Delaware court decision that said board members could not be locked into certain decisions through contracts with powerful individual shareholders....
...Elon Musk’s $55bn pay package from Tesla has been voided by a Delaware judge, who ruled that the unprecedented remuneration was improperly approved by the electric-car maker’s board of directors and had...
...Nick Hardwick, a former HM Chief Inspector of Prisons and ex-parole board chief, was the preferred candidate of the House of Commons to become the head of the Parliamentary and Health Service Ombudsman,...
...The lawyers who represented victorious Tesla shareholders may be in line for a record-breaking payout worth hundreds of millions, or even billions, of dollars after a Delaware court on Tuesday voided a $56bn...
...Icahn’s letter gave no indication he would wage a new board room battle at Illumina, but he has sued certain Illumina board members in Delaware court....
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