Tesla’s Law Firm Drafts Delaware Corporate Amendment

A law firm representing Tesla and Elon Musk has draughted proposed legislation that would amend Delaware corporate law, potentially paving the way for the reinstatement of Musk’s 2018 CEO pay package.

Richards, Layton & Finger (RLF) confirmed its involvement in draughting the bill, which was introduced in the Delaware General Assembly on Monday.

The bill must be approved by both state chambers and Governor Matt Meyer to become law. If adopted, the legislation could remove Musk’s classification as a “controller” of Tesla, impacting transactions such as mergers, acquisitions, and executive compensation.

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The bill has faced criticism for not following the usual legislative procedures and bypassing the Delaware State Bar Association’s Corporation Law Council.

Senator Elizabeth Warren and other critics argue that the legislation undermines protections for minority shareholders, favouring controlling shareholders like Musk.

Delaware Secretary of State Charuni Patibanda-Sanchez stated that Governor Meyer has requested a review of the proposed legislation to ensure it meets stakeholders’ needs.

The controversy highlights ongoing tensions between Musk and Delaware’s judiciary, with some business leaders also expressing dissatisfaction with the state’s legal environment.

CNBC