(Photo by Nathan Laine/Bloomberg via Getty Images)
The most ardent fans of Elon Musk have decided en masse to spout their deranged nonsense to an audience of no one. In perhaps the most poetic homage to the man who owns ex-Twitter, Tesla shareholders have sent a deluge of complaint letters to Chancellor Kathaleen McCormick over the Delaware judge’s recent decision striking down Musk’s $56 billion Tesla compensation package. Specifically, the investors are mad that the attorneys who successfully challenged the package have asked for $6 billion in Tesla stock.
So NOW the investors are worried about the company squandering assets.
In her decision, McCormick determined that the Tesla board suffered from severe conflicts of interest when it awarded Musk the historically lucrative pay package.
Musk publicly grumbled about the decision, announcing his intention to move Tesla from Delaware and reincorporate in another state. One might ask why Musk incorporated in Delaware in the first place, but that would require reminding everyone that Musk did not actually found the company and just parlayed his investment into supplanting the founders, and his fans have no interest in dwelling on those details.
But those same acolytes do want the chancellor to have her own Miracle on 34th Street moment but instead of letters to Santa, she gets letters from crypto bros who think it’s smart finances for a company with $100 billion in assets to pay a little over half that amount to its CEO who spends most of his day typing nonsense about vaccines and trans people.
Forbes describes some of the letters that investors are sending:
“Elon Musk deserves the original compensation package in full,” reads another X post. “On top of that, I was surprised to learn that the lawyers who filed and ‘won’ this Class Action lawsuit demanded a roughly $5.9 billion compensation in Tesla shares, claiming it was to protect Tesla shareholders. Nothing could be further from the truth.”
That does seem like a lot of money for the attorneys, but given that they’ve saved the company 10 times that amount and that this award aligns them with the interests of the company’s long-term success.
“Respectfully, I believe that this judgement is dangerous and misguided, extremely shareholder-hostile and sets a new precedent that will now mark Delaware going forward as being the state with the most business unfriendly environment,” Blake wrote.
Yes, the very “business unfriendly environment” that *checks notes* protects companies from paying their CEOs more than any executive in the history of ever.
However, the best part of all these complaints is that the judge isn’t even reading them:
Delaware Chancery Court Chief Judge Kathaleen St. J. McCormick said she’s not reading the letters. The state judiciary’s ethics code “prohibits me from considering” the letters from non-parties in the litigation “who claim to hold stock in Tesla,” she wrote to lawyers on both sides. She asked the attorneys to recommend a process for handling the letters.
Might we suggest the trash? Sorry. In the spirit of electric cars, let’s say the recycle bin.
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
