Tesla Tightens Lawsuits

Tesla’s Strategy

Recently, Tesla has decided to make it tougher for shareholders to sue them over breaches of fiduciary duty. So what’s the new rule? To bring such a case forward, an investor now needs to hold at least 3% of Tesla’s shares. Given Tesla’s current market value, that’s a staggering $34 billion stake. It’s a significant shift, especially if you remember that it was just a regular Tesla stockholder with nine shares that challenged Elon Musk’s controversial $56 billion compensation package.

Why the Change?

One big reason Tesla could implement this change is its recent move to Texas, where laws are more lenient compared to Delaware, where the company was originally incorporated. Texas offers businesses like Tesla some protections against shareholder lawsuits that might not be possible in other states. When Richard Tornetta first challenged Musk’s pay package, it was during Tesla’s Delaware days. But now that Tesla’s based in Texas, it seems they’re taking full advantage of their new home state’s corporate-friendly climate.

Ann Lipton, a corporate law expert, pointed out that Tesla’s utilizing Texas laws that limit investors’ ability to sue over alleged breaches of fiduciary duties. Most Tesla shareholders might not notice or worry much about this move, but it certainly throws a wrench in their ability to challenge company decisions in court.

Musk’s Compensation Drama

Elon Musk’s compensation saga has been ongoing, and his persistent efforts to reinstate his pay plan are nothing short of relentless. Back in 2018, he orchestrated a deal allowing him to buy 303 million shares for $23 each if certain targets were hit. Tesla met those targets, but a Delaware judge annulled the package, citing concerns about the board’s potential bias towards Musk.

Even after Tesla shareholders approved Musk’s pay package a second try, the judge put a stop to it again. It’s an ongoing drama with no clear end, showing just how determined Musk is to secure his mega payday.

On the Road

Tesla vehicles are renowned for their performance, often surpassing traditional competitors. Taking one for a spin feels like driving the future. The instant torque from the electric motor provides a smooth and exhilarating acceleration experience. Even someone accustomed to high-performance gasoline cars will be impressed with Tesla’s electric power delivery, which sets the bar high in the automotive world.

With advanced features like Autopilot, the driving experience is not just about speed and torque. It’s about redefining how we interact with cars. Compared to other electric vehicles on the market, Tesla offers a unique blend of technology, range, and performance that makes it a standout choice for those ready to embrace electric driving.