Michael R. Levin is the Founder and Editor of The Activist Investor. This post is based on his TAI memorandum.
Sounds like a novel, right? Rather than our effort to distill to its essence the complicated, enormous lawsuit that TSLA shareholder Richard Tornetta won against CEO Elon Musk and eight directors to clawback $56 billion in exec comp? Now that TSLA published its preliminary proxy statement for its 2024 AGM, we know how the company wants to respond to that lawsuit.
Tornetta v. Musk, an Unlikely Story
To refresh memories, Tornetta sued in 2018, with a trial in Delaware Chancery Court in February 2023 before Chancellor Kathaleen McCormick. (She presided over a number of TSLA and Musk matters, including the director comp case where we intervened and the one requiring him to buy Twitter.) In January 2024, Chancellor McCormick issued her order, rescinding the entire $56 billion in stock options the BoD granted to Musk in 2018.