Elon Musk wins back his $44.9 billion Tesla pay package in shareholder vote
Tesla shareholders voted Thursday to restore CEO Elon Musk’s record $44.9 billion pay package that was thrown out by a Delaware judge earlier this year, sending a strong vote of confidence in his leadership of the electric vehicle maker.
The favorable vote doesn’t necessarily mean that Musk will get the all-stock compensation anytime soon. The package is likely to remain tied up in the Delaware Chancery Court and Supreme Court for months as Tesla tries to overturn the Delaware judge’s rejection.
Musk has raised doubts about his future with Tesla this year, writing on X, the social media platform he owns, that he wanted a 25% stake in the company in order to stop him from taking artificial intelligence development elsewhere. The higher stake is needed to control the use of AI, he has said.
Someone ELI5 why does a Delaware court have any say over tesla stock options?
This Reuters article provides a decent summary: https://www.reuters.com/legal/case-against-elon-musks-56-billion-pay-package-2024-01-30/
Tesla is incorporated in Delaware.
To add onto this for anyone interested, the reason it and many businesses are incorporated in Delaware specifically is because it has a very pro-business legal and judicial system. Many businesses benefit from choosing that state over others and can find loopholes that allow them to save money (though there have been efforts to eliminate those loopholes in much of the country).
Phil Edwards recently released a video on this, which is how I found out about it: https://youtu.be/b4q99EuZF_Q
And this is the article that inspired the video: https://www.atlasobscura.com/places/corporation-trust-center