April 18 Reuters Tesla and Elon Musk are seizing upon an obscure provision in corporate law to attempt to restore Musk39;s 56 billion pay package, in an untested move that could again mire the company in litigation, legal experts said.
The electric vehicle maker on Wednesday proposed putting Musk39;s 2018 pay deal to a shareholder vote, even though a Delaware judge voided it in January.
Tesla is using a littleknown section of Delaware39;s corporate law that lets companies fix procedural defects that would otherwise nullify their boardroom decisions.
Tesla called the approach novel in its securities filing and said the special board committee that approved it could not predict how it would be treated under Delaware law.
Eric Talley, a professor at Columbia Law School, said the provision is meant to be a BandAid for technical boardroom mistakes, not to undo major court rulings.
Tesla said in the proposal that thousands of shareholders were incensed over the ruling by Delaware Chancellor Kathaleen McCormick, who found that Tesla directors were not independent when they recommended the unfathomable package and failed to negotiate with Musk.
McCormick ruled after years of litigation and a weeklong trial that those and other key details were withheld from investors before they voted to approved the pay package.
Tesla proposed to fix that in two ways. In an attempt to remove board conflicts, it had an independent director, Kathleen WilsonThompson, review the 2018 pay deal…