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Executive Compensation Breach of Duty Controlling Stockholders

Lowenstein Sandler LLP

Corporate Governance Takeaways Following Rescission of Elon Musk’s $55.8 Billion Equity Compensation Package

“Was the richest person in the world overpaid?” That’s how the Delaware Court of Chancery (the Court) began the 200-page opinion in Tornetta v. Musk to rescind Elon Musk’s entire $55.8 billion 10-year equity compensation...more

Goodwin

Delaware Court of Chancery Rescinds Elon Musk’s $55.8 Billion Compensation Package in Cautionary Tale About Director Independence...

Goodwin on

On January 30, 2024, the Chancellor of the Delaware Court of Chancery struck down the $55.8 billion compensation plan that Tesla, Inc.’s board of directors had granted to Tesla’s well-known CEO, Elon Musk, finding that the...more

Morris James LLP

Delaware Supreme Court Clarifies Materiality Standard for Director Disclosure

Morris James LLP on

A plaintiff challenging a merger when a majority of the board approving the transaction is disinterested and independent and there is no controlling stockholder on both sides cannot state a cognizable claim of breach of...more

Jones Day

Chancery Court Requires Entire Fairness Review of Tesla CEO Compensation

Jones Day on

The Background: A shareholder challenged an extraordinary and extremely lucrative incentive-based compensation package awarded by Tesla to its chair, CEO, and controlling shareholder, claiming a breach of fiduciary duties. ...more

Dechert LLP

Electricity in the Air: Court Decides that Stockholder Ratification Not Enough to Insulate Tesla CEO’s $55.8 Billion Compensation...

Dechert LLP on

The Delaware Chancery Court rejected an attempt by Tesla’s Board of Directors to dismiss a challenge to CEO Elon Musk’s “extraordinary” 2018 compensation package. Because Musk is also Tesla’s controlling stockholder, the...more

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