DELAWARE (Reuters) – The Delaware judge who overturned Elon Musk’s record compensation at Tesla told parties in the case that she felt assured by the electric vehicle maker that it would not use the next shareholders vote to challenge its decision.
WHY IT IS IMPORTANT
The shareholder legal team that sued over Elon Musk’s $56 billion salary had asked Chancellor Kathaleen McCormick for orders to prevent their case from being overturned in a Texas court.
The company’s shareholders will vote next month to “ratify” the wage plan canceled by McCormick and to reincorporate Tesla in Texas.
CONTEXT
The shareholder’s legal team said in a court filing in April that Tesla and Musk could try to overturn McCormick’s decision in another jurisdiction, such as Texas.
Tesla called it “rank speculation” in court documents and said Delaware would retain jurisdiction over the wage dispute, comments that McCormick took as assurance that the company would not attempt to circumvent its previous ruling.
KEY QUOTE
“If I have misinterpreted the defendants’ position, then defense attorneys – as officers of the court – have a duty to correct it. In the meantime, the defendants’ statements give me great comfort,” McCormick said in his seven-page document. letter.
AND AFTER
Tesla shareholders will vote June 13 on whether they still want to take advantage of Musk’s pay package and reincorporate in Texas, where the company is headquartered, from Delaware, where the majority of large publicly traded companies have their legal domicile.
McCormick must decide whether the shareholder’s legal team should obtain the $6 billion requested from Tesla in legal fees before Musk and Tesla can appeal. She scheduled a July 8 hearing on legal fees.
THE ANSWER
Greg Varallo, attorney for shareholder Richard Tornetta, declined to comment.
Lawyers for the company did not immediately respond to a request for comment.
(Reporting by Peter Henderson; editing by Stephen Coates)
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