Some shareholders of the U.S. electric vehicle company Tesla have filed consecutive lawsuits in Delaware courts ahead of the company's planned relocation of its corporate headquarters to Texas.
According to Bloomberg News on the 13th (local time), at least three lawsuits challenging Tesla CEO Elon Musk's mismanagement were filed last week in the Delaware Court of Chancery.
One of these lawsuits alleges that Musk threatened shareholders by stating he would transfer AI-related assets outside of Tesla ahead of the shareholder meeting to vote on a performance compensation plan worth hundreds of billions of dollars, effectively coercing the approval in his favor.
Another lawsuit raised concerns that Musk misappropriated Tesla's resources during the 2022 acquisition of Twitter (now X). The remaining lawsuit claims that Musk violated Tesla's service regulations by diverting Tesla's AI-related resources to establish the AI startup xAI.
However, since Tesla approved the plan to move its corporate headquarters to the business-friendly state of Texas at the shareholder meeting held that day, Bloomberg News analyzed that it will become more difficult to hold the company accountable for these lawsuits after the relocation to Texas.
At the same shareholder meeting, the proposal to reapprove the 2018 compensation plan granting stock purchase rights (stock options) to CEO Musk based on management performance was also passed.
Previously, Tesla approved a proposal at the 2018 shareholder meeting to grant CEO Musk stock options worth approximately $56 billion (about 77 trillion KRW). However, this was overturned in January this year when a Delaware court ruled in favor of a minority shareholder's invalidation lawsuit. Consequently, Musk and Tesla expressed their intention to appeal, and to secure a favorable position in the appeal trial expected in July, the reapproval of the compensation plan was put to a vote at this shareholder meeting.
The stock option compensation plan stipulates that Musk will receive a total of 303 million stock options in 12 installments upon achieving phased performance targets based on revenue, market capitalization, and other criteria. The value of the stock options, which previously amounted to $56 billion, is approximately $48 billion (about 66.1 trillion KRW) based on the closing price of $182.47 on the day.
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