Democrats are expected to pass a bill (drafted by Elon’s lawyer) that threatens your retirement fund
Delaware has long been home to most companies in the U.S. due to its highly loose business laws. But leniency is obviously not enough for the wealthiest people in the world, whose lawyers introduced legislation to rewrite the state’s laws as companies that boldly give to already very powerful companies. Critics say the legislation will cause companies to behave at a large scale and leave shareholders with little retaliation. Worst of all, the state’s Democratic-controlled legislature is eager to pass the bill.
The legislation concerned was drafted by Richards, Layton & Finger (RLF), which considers Musk as one of its clients. If the bill passes, it will “pave the way to restore Musk’s highly-watched $55 billion Tesla compensation package,” CNBC wrote, which the billionaire has been under the radar for the past few years.
Musk’s huge spending has been the subject of a judicial battle that has been going on for more than five years. A Delaware judge, Kathaleen McCormick, had repeatedly thwarted Musk’s attempt to receive spending, claiming that the process that led to the approval of the compensation package was seriously flawed, and the compensation was “an incredible sum.” As of December, the billionaire was still deprived of his salary plan.
The new legislation will change the law in a way that judges currently oppose Musk’s compensation plan. But the law will do things for the arduous paths of billionaires’ obscene compensation packages. It will also fundamentally rewrite corporate law, which most companies in the United States call home, according to critics. In this way, it will fundamentally change the balance of power between the company’s trustee and shareholders, which enables the company to increase the company’s confidentiality ten times, while also making it nearly impossible for shareholders to file lawsuits for company misconduct.
RLF claims that its role in legislation is not done on behalf of a specific client. Leverage writes that the bill has the ability to rewrite shareholders’ current protection capabilities:
The bill would revoke disclosure requirements for various corporate documents, records and internal communications required by shareholders. All plaintiffs will have the right to have a few minutes away from the board meeting, which is barely shown. These changes will make it almost impossible for shareholders to establish any feasible lawsuits, and can even reach the discovery stage of the facts found in court cases.
So Musk is not the only powerful person to push the bill through. MAGA has been exodus for companies from the state, with many powerful tech figures (including Führer CEOs Mark Zuckerberg and Trump-Fan Bill Ackman) threatening to drive their company out of Delaware (if the state government is like Tesla), if the state government is like Tesla), rather than kowtow to benefit businesses. Walmart also threatened to leave the state.
From a problematic perspective, most of Delaware’s state budget is backed by company expenses, and this kind of exit may be one of its biggest sources of income. As a result, it seems that Delaware’s Democratic government is ready to support this attack on a company-led legal infrastructure. A local media pointed out that there is a “bipartisan” agreement that companies from the state must stop leaving Egypt.
The Public Pension Fund Group recently sent a letter from the Governor of Delaware and the Delaware Convention, begging the government not to pass the bill. These groups represent retirement systems for union and public sector employees, and are aware of how many of these pensions are tied to corporate investments that will be affected by policy changes.
“For more than a century, the Delaware courts have maintained a careful and fair balance between protecting public shareholder rights, while allowing good faith directors and senior executives to manage corporate affairs,” the letter reads. “The proposed legislation will destroy this balance and bind it as a key role in the Delaware judiciary as an over-cross-check of trusts. This is not accidental, as the proposed legislation was drafted by attorneys representing billionaire controlling shareholders, and the Delaware court found a breach of its fiduciary obligations.”
“We know the need for these amendments is that controlling shareholders threaten to leave Delaware because of complaints from a handful of dissatisfied litigants. It should be clear that we will not support a reinvestigation of less protected jurisdictions such as Nevada, and we will consider voting against directors who propose such reinvestigation to reduce their shareholder rights.”
“What these companies want is that shareholders or courts cannot review their actions,” shareholder attorney Mark Richardson recently told Semafor. “Celebrating those extreme views to please some companies is a terrible mistake in Delaware that will destroy the franchise in the long run.”
