The Process Matters

MESSAGE FROM THE PRESIDENT

February 19, 2024

You may have heard news recently about a Chancery Court decision involving Tesla and Elon Musk. In the aftermath of this decision, which struck down Musk’s compensation package, Chancery Court Chancellor Kathaleen McCormick ruled that Musk and the Tesla board “bore the burden of proving that the compensation plan was fair, and they failed to meet that burden.” Click here to read more >

Regardless of what anyone thinks about a compensation package of $55.8 billion, compensation committees and corporate boards have to do their work. One would think that deliberations over a plan of this magnitude were lengthy, detailed, and resulted in several back-and-forth rounds of discussion and negotiation. Anything less would call into question the value of compensation committees, boards, and incorporating here.

Compensation committees and boards have a duty to protect shareholders and make sound decisions. While the specific details of the Tesla case may spark debate, the takeaway for Delaware corporations is clear: thorough and documented processes within compensation committees and boards are crucial for protecting shareholders and upholding their legal duty. This decision affirmed that the process matters for any incorporated entity here in Delaware.

News You Can Use

Happy President’s Day! With the observance of the federal holiday, financial institutions and markets are closed, so our week for economic news starts up Tuesday with the morning release of U.S. leading economic indicators and results from January. Thursday brings us existing home sales from January, and an afternoon speech from Philadelphia Fed President Patrick Harker. Overall, a light week for economic data and associated news.

Tuesday calls are headlined by several State Chamber members including Home Depot, Walmart, Barclays, and International Flavors & Fragrances. Chipmaker Nvidia headlines the Wednesday calls, and is joined by Bally’s, Chesapeake Utilities, Exelon, United Therapeutics, Wingstop and others. Carvana, Enovis Corporation, Intuit, Iron Mountain, Moderna, Planet Fitness, Wayfair, TransAlta, and Warner Bros. Discovery round out the week of calls.

Michael J. Quaranta

President

Delaware State Chamber of Commerce

Uniquely Delaware

Coolest Thing Made in Delaware: LAST CHANCE to Nominate!

We're seeking to determine the Coolest Thing Made in Delaware! The contest aims to highlight Delaware’s vibrant and diverse manufacturing industry, which employs 28,000 Delawareans, and promote the sector as a top career path. The nomination form closes TOMORROW. Nominate a product >

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