Good afternoon,
(Slights photo from Eric Crossan)
We could see a groundbreaking Chancery trial in 2020 that features a celebrity CEO.
Vice-Chancellor Joseph Slights, III, made an unexpected ruling to hold a trial in a case involving an eye-popping compensation package for electric vehicle maker Tesla’s mercurial CEO Elon Musk.
A Tesla shareholder unhappy with the package took the case to Chancery Court.
A story in Barron’s outlined the possible reasons for Slights taking on the case.
The issue is not the big bucks. Instead, Slights is likely to look at whether the board was meeting its fiduciary duties in coming up with the package.
The likely reasoning behind the compensation package centers on an attempt to keep Musk focused on Tesla, a company that mirrors Musk’s soaring ambitions and shifting strategies in a brutally competitive industry.
The California company managed to turn a small profit after another rough patch earlier this year that led short sellers to jump in. They lost again.
The serial entrepreneur also controls the SpaceX rocket transport company and the Boring Co., an enterprise that aims to build a high-speed transport system. The company has already dug a tunnel in Los Angeles.
A groundbreaking ruling by Slights might upend the long-running trend toward expansive pay and stock packages that according to critics focus on the short term and in some cases encourage selling off assets, rather than building businesses.
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