A law firm representing Elon Musk and Tesla has drafted a proposed legislation that could overhaul Delaware corporate law, paving the way for the reinstatement of Musk’s 2018 pay package worth tens of billions of dollars.
The bill, if adopted, would amend Delaware General Corporation Law, reducing the influence of minority shareholders. It would require approval by the state’s two chambers and Governor Matt Meyer before it becomes law.
Under the proposed legislation, Musk might no longer be considered a “controller” of Tesla, as he does not currently hold one-third of the company’s voting securities. This could limit his ability to make significant changes to the company without judicial scrutiny.
The bill also restricts access to documents used in “books and records” inspection requests, limiting minority stakeholders’ ability to obtain informal communications between board members and executives.
Critics argue that the proposed legislation would undermine corporate law protections for minority shareholders. Senator Elizabeth Warren called the draft legislation Musk’s “latest plan to rip off the American people,” stating that it would allow him to take tens of billions of dollars from Tesla shareholders after the courts said he couldn’t.
The bill was introduced in the Delaware General Assembly on Monday and has sparked concerns about its impact on corporate governance.
Source: https://www.cnbc.com/2025/02/18/firm-representing-musk-tesla-drafts-bill-for-delaware-corporate-law.html