As Tesla, Inc.’s (NASDAQ:TSLA) shareholders gear up to review and vote again on CEO Elon Musk‘s compensation plan, legal experts suggest the proposal may face significant hurdles.
What happened: Tesla has sought the ratification of its previous plan, which was invalidated by a Delaware Chancery court, noted Ann Lipton, Associate Professor of business Law and Entrepreneurship at Tulane University Law School, in an interview with CNBC.
“What they’re proposing is to grant Musk $55 billion, though the amount is now lower due to the stock downturn, for his past work. It’s uncertain whether a majority vote of shareholders can even authorize such an action,” she remarked.
Lipton further indicated that the proposal might require unanimous shareholder approval, rather than a simple majority, which considers only the voting members present. That kind of generosity of paying for past work is “unnecessary, could ...