The Delaware Court of Chancery in Richard J. Tornetta v. Elon Musk, et al. and Tesla, Inc., C.A. No. 2018-0408-JRS, opinion (Del. Ch. Sept. 20, 2019), found a controlling stockholder’s incentive compensation plan, approved by a majority of minority stockholders but not an independent committee, was subject to review for entire fairness, but standard shifting would have been possible under MFW.
NEW: Jones Day discusses the decision in Chancery Court Requires Entire Fairness Review of Tesla CEO Compensation.
Professor Stephen Bainbridge discusses the decision in Delaware Chancery Court Clarifies Review Standard for Challenges to Conflicted-Controller Transactions.
K&L Gates discusses the decision in Maintaining Good Corporate Governance: Entire Fairness Creeping Into Actions Benefiting A Controlling Stockholder.