Delaware lawmakers are introducing a bipartisan bill to address concerns sparked by Tesla CEO Elon Musk’s criticism of the state’s courts, amid fears that other major companies may leave the state. The proposed amendment aims to make statutory changes more friendly to executives who are also controlling shareholders, like Musk.
A law firm that represents both Musk and Tesla has helped draft the bill, which is titled Senate Bill 21. However, critics argue that the process lacked transparency and that the bill’s rapid development may undermine Delaware’s reputation as a premier jurisdiction for incorporation.
The proposed changes would address issues raised by Musk during his pay dispute with Tesla, but supporters claim it’s essential to restore core principles of Delaware corporate law to ensure the state remains the go-to legal forum.
Lawmakers argue that time is of the essence, citing potential shareholder votes to reincorporate as a looming threat. However, critics worry that this may weaken Delaware’s hold on U.S. corporate law and undermine the credibility of the state’s courts.
The bill has sparked controversy, with some lawmakers and business leaders expressing concerns about its impact on minority stockholders and institutions. Phil Shawe, CEO of TransPerfect, had spent millions on ads criticizing Delaware courts after a legal battle with his former fiancée, who cofounded the company with him.
Source: https://fortune.com/2025/02/21/elon-musk-tesla-pay-package-delaware-courts-change-state-law