Ark Invest CEO Criticizes Delaware Court's Decision on Musk's Pay Package
The founder and CEO of Ark Invest, Cathie Wood, expressed her disagreement with the Delaware court's ruling that voided Elon Musk's performance-based pay package.
Wood Challenges Delaware Court's Ruling
Cathie Wood, the CEO of Ark Invest, has publicly criticized the Delaware court's decision to void Elon Musk's performance-based pay package. In a post on X, Wood described the ruling as 'unAmerican' and an 'assault on investor rights.' She also expressed her belief that it was an insult to the Board of Directors of Tesla, which she considers one of the most successful companies in American history.
Wood and Ark Invest's General Counsel conducted a thorough analysis of the Delaware Court's decision, examining over 200 pages of documentation. According to their assessment, the court's interpretations missed several crucial points. The ruling by Judge Kathaleen McCormick of the Delaware Court of Chancery deemed Musk's 2018 pay package unreasonable due to its 'unfathomable sum.'
Shareholders and Musk React to the Ruling
Despite the court's decision, Wood revealed that ARK Invest voted in favor of Elon Musk's compensation in 2018, as did approximately 80% of shareholders. Wood expressed her disappointment that a Delaware judge could overturn the decision made by the Board of Directors and shareholders, who had thoroughly debated the viability of the incentive plan. The ruling, in her opinion, undermines the importance of shareholder engagement and input.
Elon Musk, in response to the Delaware court's decision, conducted a poll on X asking the public whether Tesla should change its state of incorporation to Texas. This move suggests Musk's discontent with the ruling and the possibility of considering a relocation of the company. Additionally, Tesla's shareholders have written to the Board of Directors, expressing support for changing the company's state of incorporation from Delaware to Texas. Alongside this request, shareholders have also urged the Board to explore options to maintain Musk's 2018 pay package and develop a new CEO compensation plan similar to the previous one.
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