“A Delaware judge just overruled a supermajority of shareholders who own Tesla and who voted twice to pay @elonmusk what he’s worth. The court’s decision is wrong, and we’re going to appeal,” Tesla said in a post on X.
Tesla’s promised appeal will bring the case to the Delaware Supreme Court.
“Shareholders should control company votes, not judges,” Musk responded to the ruling.
“Procedure protects everyone, the majority and the minority,” said Charles Elson, a leading authority in Delaware on corporate governance and executive compensation. “If you don’t protect minority investors, then you’re going to lose their investment.”
“There is no two sets of law, one for all of us and then a special set for executive superstars,” Elson continued. “It’s all the same, and [the judge] applied the law exactly as it should have been applied.”
Delaware Chancellor Kathaleen McCormick initially voided Musk’s pay plan in January 2024. It was the largest public company compensation in U.S. history.
A Tesla shareholder sued, saying it was excessively high and not in the company’s best interest.
McCormick agreed with her ruling and questioned the independence of Tesla’s board. That ruling, though, had a cascading effect.
Following the initial ruling, Musk took to X, saying, “Never incorporate your company in the state of Delaware.”
Delaware has become America’s corporate home with about 2 million businesses. Companies outnumber people 2-to-1.
In June, Tesla shareholders voted to move its incorporation to Texas, where Tesla is headquartered. They also overwhelmingly approved Musk’s original, challenged compensation plan in the same vote.
The vote was not likely to change Musk’s legal woes, but the company attempted to use it anyway. Six months later, McCormick held fast to her initial ruling despite four times as many shareholders voting for the pay plan than against.
“She found that this package was unfair to the company, [that it] was a gift, effectively, of assets to Mr. Musk. And once that’s the case, you can’t give away company money without a corporate purpose without everyone approving of it,” Elson explained.
For the second hearing on Musk’s compensation package, McCormick questioned the timing of the shareholder vote, which occurred after she had already ruled on the case.
“The whole thing was very strange. It was an odd way of approaching it,” Elson said.
He said the best approach would have been to institute an independent board of directors and start the process over.
Musk’s initial compensation package was built on performance and valuation goals. While it was worth $56 billion at the time in question, Tesla has seen a big boom from the Trump trade. Since the stock rally following Donald Trump’s election victory, Reuters reported the initial package is now worth more than $100 billion.
Tesla stock fell more than 2% Tuesday, Dec. 3, after the news that McCormick rejected Musk’s pay package again.
Republican introduces transgender bathroom ban for Capitol Hill
History will be made four times over when the 119th Congress meets for the first time in just a few weeks. However, some current representatives introduced legislation to create a transgender bathroom ban that targets a new coworker.
In the House of Representatives, Sarah McBride will become the firstopenly–transgender person to be elected to Congress after winning Delaware’s only open House seat. Delaware will also see its first Black U.S. senator, who will simultaneously be the first woman to represent the state in the Senate. Maryland will also be represented by its first Black U.S. senator, and New Jersey will see the first Korean-American senator.
The measure would prohibit any lawmakers and House employees from “using single-sex facilities other than those corresponding to their biological sex.”
“Sarah McBride doesn’t get a say in this,” Mace said when asked by reporters whether the move was meant to target a marginalized person. “He’s a biological man trying to force himself in women’s spaces and I’m not gonna tolerate it. You have the radical left that are trying to erase women and erase women’s rights.”
“This is about women, this is about girls, this is about our rights and being protected in our private spaces,” Mace added. “I don’t want to see a man in a women’s restroom.”
Every day Americans go to work with people who have life journeys different than their own and engage with them respectfully, I hope members of Congress can muster that same kindness.
“Every day Americans go to work with people who have life journeys different than their own and engage with them respectfully, I hope members of Congress can muster that same kindness,” McBride wrote.
McBride went on to say the move is an attempt from far-right wing extremists to distract from the real problems facing Americans, like the cost of housing, health care and child care.
Trump speaks of ‘incredible’ win after projected to be next US president
Donald Trump is poised to win the presidency again. How Georgia, North Carolina and Pennsylvania helped put him over the top. And while Republicans have picked up seats in the Senate, will they also take the House? A look at where things stand. These stories and more highlight your Unbiased Updates for Wednesday, Nov. 6, 2024.
Trump speaks of ‘incredible’ win after projected to be next U.S. president
Former President Donald Trump declared victory while addressing supporters in Florida early Wednesday morning, Nov. 6, as his lead over Vice President Kamala Harris grew. He picked up critical wins in key battleground states Pennsylvania, Georgia, and North Carolina.
“We overcame obstacles that nobody thought possible, and it is now clear that we’ve achieved the most incredible political thing,” Trump said. “Look what happened — is this crazy? But it’s a political victory that our country has never seen before, nothing like this. I want to thank the American people for the extraordinary honor of being elected your 47th president and your 45th president.”
Harris’ path to the 270 electoral votes has become less of a possibility, with most media outlets projecting Trump as the winner Wednesday morning. As of the time this article was published, Fox News, ABC, NBC, CBS, the Associated Press and Decision Desk HQ, a forecasting and analysis organization, have projected him to be the winner.
Donald Trump wins presidency for second time, completing improbable comeback https://t.co/VGPT8X5I88
Trump, who survived two assassination attempts during the campaign, was surrounded by family, Republican leaders, and his running mate Ohio Sen. JD Vance as he addressed the crowd inside the Palm Beach Convention Center around 2:30 a.m. ET Wednesday.
“America has given us an unprecedented and powerful mandate,” he told supporters. “Many people have told me that God spared my life for a reason and that reason was to save our country and to restore America to greatness and now we are going to fulfill that mission together.”
Vice President Harris, who picked up wins in California and New York, did not speak Tuesday night, Nov. 5, but earlier in the evening campaign co-chair Cedric Richmond spoke to supporters at Howard University. He said the vice president was not giving up the fight despite how the numbers were going.
“We will continue overnight to fight to make sure that every vote is counted, that every voice has spoken, so you won’t hear from the vice president tonight, but you will hear from her tomorrow,” he said. ”She will be back here tomorrow to address not only the HU family, not only to address our supporters, but to address the nation.”
Multiple news networks have confirmed Harris is slated to speak Wednesday morning. However, it is worth noting there reportedly has been no concession call yet from Harris to Trump.
Ray Bogan recaps election night from Washington
Washington is going to look a lot different in January.
Donald Trump made an extraordinary comeback. He lost the electoral and popular votes in 2020 after stinging defeats in Georgia, Arizona and Pennsylvania. This time around Trump won back both Georgia and Pennsylvania. He also took Wisconsin.
Republicans also won a majority in the Senate, with key victories in Ohio and West Virginia pushing them over the top. This will give them a key advantage as they work to confirm Trump’s cabinet picks and judicial nominations.
It’s important to remember that the majorities in Congress are razor-thin and nowhere near filibuster-proof in the Senate. So passing legislation will require bipartisanship.
The big question now is – who will be the Senate majority leader? The three candidates are John Thune from South Dakota, John Cornyn from Texas and Rick Scott from Florida.
Balance of power in Congress shifts, GOP retakes control of Senate
As Ray mentioned, the balance of power is shifting in Congress. Republicans will retake control of the Senate for the first time in four years.
The GOP flipped seats in West Virginia and Ohio, giving Republicans at least a 51-seat majority in the Senate.
In West Virginia, Republican Gov. Jim Justice is slated to replace the outgoing Sen. Joe Manchin, an independent who caucused with Democrats. In Ohio, Republican Bernie Moreno is projected by multiple outlets to defeat incumbent Democrat Sen. Sherrod Brown.
How the House of Representatives will play out remains to be seen. Republicans are hoping to retain control of the chamber.
They currently hold a slim majority, yet there are still over 100 races yet to be determined as of the time of publishing. Going into the night, Democrats needed to flip four seats to gain.
Stein wins in NC governor’s race, Republicans see victory in other states
Voters in 11 states also chose their next governors. While Republicans won big, Democrats did manage to retain power in several states.
North Carolina remained blue after the state’s Democratic attorney general, Josh Stein, beat out controversial Republican Lt. Gov. Mark Robinson. Robinson — who made history as the first Black lieutenant governor in the state — was already trailing in the polls, but his numbers took a dive in mid-September after CNN released a report detailing comments he allegedly made on a pornography website message board more than a decade ago on race, gender and abortion.
Thank you, North Carolina! I am honored to serve as your next governor. Tonight, we came together to resoundingly embrace a vision that is optimistic, forward-looking, and welcoming. I couldn't have done this without each of you. pic.twitter.com/3eeGGTVHed
In Delaware, Democrat Matt Meyer wins the race for governor. Meyer defeated Republican Mike Ramone and will take over from two-term Democratic Gov. John Carney.
Washington state will stay blue after Attorney General Bob Ferguson beat out Republican challenger Dave Reichert for the job. The seat was up for grabs after Democratic Gov. Jay Inslee said he would not be running again after serving three terms.
Indiana went from blue to red, with Republican Mike Braun defeating Democrat Jennifer McCormick. McCormick is a former Republican who split with the party after serving as the state’s schools superintendent.
Meanwhile, Republican Missouri remained red. The state’s Lt. Gov. Mike Kehoe is set to replace term-limited Republican Gov. Mike Parson.
North Dakota stayed red, as well. Kelly Armstrong is projected to succeed Gov. Doug Burgum, who also chose not to run again after serving three terms. It is possible Burgum will get a place in the Trump administration.
Republicans will now have governors in 27 states; Democrats in 23.
*Editor’s Note: This story has been updated since our recording to correct that North Carolina did not flip blue as the current governor, Roy Cooper, is a Democrat.
Voters in four states chose whether to enshrine abortion as a constitutional right. The measure did not pass in Florida, Nebraska or South Dakota, but did in Colorado and Nevada.
Nebraska voters actually had two abortion-related measures on their ballot. While the constitutional right to an abortion failed, the other measure, which would prohibit abortions after the first trimester, passed.
Five other states were deciding on the right to an abortion. The measures passed in Arizona, Maryland, Missouri, and New York and is expected to make it through in Montana.
3 newly elected senators, 1 congresswoman making history
History was made in three states on Election Day.
In Delaware, Lisa Blunt Rochester — who already made history as the first woman and first Black person to represent the state in Congress — will now become the first Black woman to represent Delaware in the U.S. Senate.
Maryland Democrat Angela Alsobrooks will be the first Black candidate to represent her state in the Senate.
We just won our Senate race! As a son of immigrants, a public school kid, I never could’ve imagined I’d get to serve as a US Senator. I’m deeply humbled and grateful to NJ and for everyone who got us here. I promise I’ll serve with honor and integrity as a public servant for all. pic.twitter.com/qpuobm9Vf3
New Jersey Democrat Andy Kim will become the first Korean-American ever elected to the Senate. At 42 years old, he’ll also be the Senate’s third youngest member.
Finally, Sarah McBride, who won Delaware’s only open House seat, will be the first openly transgender person to be elected to Congress.
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Republicans claim Senate majority, end Democrats’ four-year hold
Hunter, who has struggled with drug and alcohol addiction for years, claims he repaid his taxes in 2019 after getting sober.
The trial could last about a month and it’s set to center on his failure to pay taxes while experiencing addiction. However, he still spent large amounts of money to live a party boy lifestyle.
This trial comes in the wake of his June conviction in Delaware of lying about his drug use to illegally buy a gun. He is currently appealing that ruling.
Dying with medical assistance is latest form of ‘health tourism’: Report
Living with a terminal illness can be miserable both mentally and physically, even with advances in modern medicine and technology. That is why many who face the end of their natural lives look to do so on their own terms. However, in the U.S. that is rarely an option.
A new report from KFF, formerly known as the Kaiser Family Foundation, shows dying with medical assistance, which used to be called physician-assisted suicide, is a new form of medical tourism.
Medical tourism, also known as health tourism, is when someone travels from their home, in this case, out of state, to receive treatment that would otherwise be denied or not even be an option.
Right now, dying with medical assistance is legal in only 10 states: Vermont, California, Washington, Colorado, Hawaii, New Jersey, Maine, New Mexico, Oregon and Montana, as well as Washington, D.C.
Nine of those states and the District of Columbia have laws dictating the process for choosing to die with medical assistance. In Montana, there is no specific law on the subject. However, it is not illegal after the state’s Supreme Court ruled there is no statute prohibiting health care providers from assisting patients in dying.
And while it is a sensitive topic, dying with medical assistance is being talked about in more and more states. This past legislative session, 18 states considered aid-in-dying laws. The Delaware Legislature passed one, however, that bill is still awaiting the governor’s approval.
These laws tend to apply only to residents of the individual state where dying with medical assistance is legal, but Vermont and Oregon lifted their residency requirements in 2023.
Since then, KFF says at least 26 people have traveled from other states to Vermont to die. That represents 25% of the assisted deaths reported there from May 2023 through June of this year.
According to the Oregon Health Authority, 23 people from out-of-state died with medical assistance in 2023, which is about 6% of the state’s total.
In every state that tracks medical aid in dying, more people got the prescription than actually used it, most commonly because their illness overcame them. A terminal form of cancer is often why patients seek medical assistance in dying.
President Biden to address the nation on his decision to end 2024 campaign
President Joe Biden is set to address the nation for the first time after dropping out of the 2024 presidential race. And the story of another American athlete heading to Paris hoping to bring their sport to the Olympics. These stories and more highlight The Morning Rundown for Wednesday, July 24, 2024.
President Biden to address the nation on his decision to end 2024 campaign
President Joe Biden will address the nation on Wednesday, July 24, to explain why he ended his 2024 presidential campaign. He’s also set to lay out what he will focus on in the six months remaining in his presidency.
Biden arrived back in Washington from his home in Delaware on Tuesday, July 23, for the first time in six days since he was diagnosed with COVID-19. He answered only one question from reporters upon his return, saying he’s “feeling well” after now testing negative for the virus.
In Wednesday night’s address, President Biden is expected to also explain why he believes Vice President Kamala Harris is the best candidate to take on former President Donald Trump in November.
Harris held her first rally in Wisconsin Tuesday, July 23, and she’ll address a historically Black sorority convention in Indianapolis Wednesday. On Thursday, July 25, she’s set to address a teachers union that endorsed her on July 22.
Vice President Kamala Harris rallied Democrats on Tuesday in Wisconsin, vowing to defeat Donald Trump by attacking him as a prosecutor. Harris listed her campaign pledges, which included expanding abortion rights and building a strong middle class. https://t.co/9nF2OMLKDQpic.twitter.com/Au3BeuipG0
Trump will rally in North Carolina Wednesday and then he and his running mate, Sen. JD Vance, R-Ohio, will hold a joint rally in Minnesota on Saturday, July 27.
This comes as the first few polls conducted after Harris launched her presidential campaign have been released.
In a head-to-head matchup, an NPR poll found Trump at 46% and Harris with 45% of support among registered voters. However, a Reuters poll has Harris ahead with 44% compared to Trump’s 42%.
Trump’s campaign to hold indoor rallies in aftermath of assassination attempt
Former President Trump’s campaign will reportedly now stop holding outdoor rallies on the Secret Service’s advice after he was wounded in an assassination attempt at a Pennsylvania rally. The campaign says current plans are to hold indoor events and maybe smaller outdoor ones, but only in more controlled settings.
Secret Service Director Kimberly Cheatle stepped down Tuesday, July 23, after calls for her resignation in the wake of the assassination attempt.
CAMPAIGN CA$H: "Kamala Harris is in the process of committing the largest campaign finance violation in American history." Why the Trump campaign says the Harris campaign is violating finance laws: https://t.co/DeWSsaDYtDpic.twitter.com/qE22Rnf98f
The Trump campaign has also filed a complaint with the FEC in an effort to block President Biden’s campaign from transferring $91 million to Vice President Harris’ campaign. Trump’s team says Harris improperly took over the cash after the Biden campaign account changed its name to “Harris for President.”
Harris’ campaign spokesperson has dismissed the filing.
Mass protest at U.S. Capitol ahead of Netanyahu speech
Dozens of demonstrators showed up to the U.S. Capitol Tuesday, July 23, to protest Israeli Prime Minister Benjamin Netanyahu’s visit to the U.S. The protest was organized by the group Jewish Voice for Peace.
Tuesday’s demonstration had a similar message as other high profile war protests, with demonstrators chanting “free Palestine,” “not in our name” and “stop genocide.” They protesters staged a sit-in at a congressional office building. Capitol police arrested more than 200 people.
The protest came as Netanyahu is in Washington meeting with U.S. lawmakers. Multiple other protests are already planned for Wednesday as Netanyahu is set to deliver a speech to Congress.
Netanyahu is expected to meet with President Joe Biden Thursday, July 25. He’ll also meet with Vice President Kamala Harris Thursday and former President Donald Trump on Friday, July 26, as he looks to lock in support for Israel from both candidates ahead of November’s election.
Looking forward to seeing Bibi Netanyahu on Friday, and even more forward to achieving Peace in the Middle East! DJT@realDonaldTrump Donald Trump Truth Social 10:06 PM EST 07/23/24 pic.twitter.com/duBKAOiFyD
— Donald J. Trump Posts From His Truth Social (@TrumpDailyPosts) July 24, 2024
The law originally passed last year but was then placed on hold. In June, Iowa’s Supreme Court ruled there was no constitutional right to an abortion in the state, lifting the hold.
🚨 BREAKING: Iowa’s extreme 6-week abortion ban will go into effect on Monday, July 29 at 8 a.m.
Iowans will lose the ability to make private medical decisions even though most of us believe abortion should remain legal. We will never stop fighting for reproductive freedom.
Previously, abortion in Iowa was legal for up to 20 weeks of pregnancy. Iowa will now join three other states that ban abortions after about six weeks.
Menendez resigning from Senate after federal bribery conviction
New Jersey Sen. Bob Menendez, D, will be resigning. He’s stepping down after his conviction earlier this month on 16 counts. The charges include including bribery, extortion, wire fraud, obstruction of justice and acting as a foreign agent.
Menendez’s resignation will take effect Aug. 20, giving his staffers time to find new jobs. The New Jersey lawmaker was facing mounting pressure to step down or face being expelled from the Senate.
New Jersey Gov. Phil Murphy, D, is expected to appoint a replacement to fill the remainder of Menendez’s term, which ends on Jan. 3.
Tesla earnings down amid weak electric vehicle sales
Tesla’s profit is down more than 40% for the second quarter of this year and that can mostly be attributed to weak auto sales. From April to June, the company’s revenue from its electric vehicles is down more than $1.3 billion compared to the same time last year.
Experts say Tesla is facing a double whammy of more competition from big automakers and an overall decline in EV sales.
However, Tesla owner Elon Musk is focused on the company’s future. He announced this week Tesla will have its humanoid robots “in production to be used within the company next year.”
Tesla has been working up robot models for several years as part of its efforts to expand into robots and artificial intelligence.
U.S. athletes hope showcase launches beach handball into Olympics
This is the third installment in our weeklong series taking a closer look at Team USA members and their sports ahead of the start of the Paris Olympics.
When the Olympic Games open on Friday, July 26, in Paris, viewers be able to watch beach volleyball at the Eiffel Tower Stadium.
But for USA’s Christine Mansour, Ebiye Udo-Udoma and Drew Donlin, their attention will be on another beach sport 15 miles away — beach handball.
“It’s a dream come true,” Udo-Udoma told Straight Arrow News. “There are still some preparations. I don’t think the magnitude of playing in Paris has hit me because I’m still focused on training.”
Mansour, fresh off getting her MBA, means business when it comes to giving beach handball its due.
“I always view it as a startup sport,” Mansour said. “Not that many people know about it, especially in the States. It’s so interesting because once I explain this sport to people and show them a clip, the interest is immediately piqued.”
Just like the sport itself, Udo-Udoma is better known outside the U.S., often referred to internationally by his nickname “Handball Ninja.”
“I remember shaking hands with an opponent,” Udo-Udoma said. “I said, ‘My name’s Ebiye.’ He said ‘Ninja, you don’t have to introduce yourself, we all know who you are.’ I just chuckled.”
Unlike the indoor version, beach handball is not yet an official part of the Olympics. But this year in Paris, beach handball is an exhibition sport played alongside the Olympic Games.
Mansour and Udo-Udoma are among 64 of the world’s best athletes from 18 different countries playing in a showcase with hopes for the sport to be granted a permanent spot.
“It’s very important to me that you have these mediums in life like sport where you can transcend barriers whether they are political, social or geographical,” Udo-Udoma said. “It’s nice to have something to connect you to other human beings independent of superficial restrictions.”
After playing Division 1 basketball at Harvard, Mansour found beach handball while living in California and excelled — becoming the top scorer in the 2022 World Championship, moving to the Netherlands and creating a dual-nation team. Now she is being named the only female player from North America for the showcase.
“We’re all entrepreneurs in the sense,” Mansour said. “We’re all doing our part to build this community and build this sport, build awareness, so we can continue to reach higher levels and with that the ultimate goal is reaching the Olympics.”
Mansour said one of the big differentiators setting this sport apart from others is the points for spectacular goals, including the alley oops and the spin shots.
It was those moves that first caught the attention of the future “Handball Ninja.” Udo-Udoma played at Oregon State University and joined the national team a decade ago.
“For really a couple decades worth of work to culminate into something like getting the opportunity to play under the rings, the flood of emotion that initially hit me was immense,” Udo-Udoma said.
Olympic gold is not the goal this year for these Americans. They are just out to prove beach handball belongs at the Olympics and they’re not going to miss their shot —spinning or not — to showcase that.
“So to have this opportunity as we shoot to get it on the program for Los Angeles 2028, Brisbane 2032, and to be an integral part of the history of something; that’s something that has even more value on top of what I accomplish as an individual athlete or as a competitor — to be part of something bigger than me,” Udo-Udoma said.
“For me to be part of an Olympic showcase of a sport that I’m obsessed with, that I love, and I wish the whole world knew about is the greatest honor,” Mansour added.
Tesla shareholders side with Elon Musk. Here’s why it won’t erase legal woes
Elon Musk lassoed victory in Texas on Thursday, June 13. Tesla shareholders overwhelmingly approved his pay package for the second time and voted to approve the company relocating its incorporation from Delaware to Texas.
Tesla officially announced the results at Thursday’s shareholder meeting but Musk jumped the gun nearly a full day early, posting preliminary numbers on his other company’s site, X.
Because of the posts and Tesla’s subsequent stock surge, Tesla issued a regulatory filing with the Securities and Exchange Commission. The filing simply includes Musk’s X posts.
However, experts said the shareholder votes only make the legal issues around Tesla more complicated. It does not mean Musk can walk away with his contested pay package, which shareholders have twice approved.
How did Tesla and Musk get to this point?
It all started when a Tesla shareholder sued over Musk’s pay package, which was worth around $56 billion at the time a Delaware judge struck it down. Tesla is, at least for now, incorporated in Delaware, as are the vast majority of Fortune 500 companies.
“The judge’s concern was that the disclosure to the shareholders about this package was inadequate; that there are serious flaws, she felt, in the process; the independence of the directors; how the thing came together,” Charles Elson, a renowned expert in corporate governance in Delaware, said. “And she felt that, obviously, had disclosure been more accurate, that the shareholders may not have approved it.”
Straight Arrow News spoke with Elson about Musk’s compensation issues after Musk blamed the state of Delaware for the blow to his pocketbook and warned other companies to stay far away.
“Simply because a CEO is upset at a ruling against him in a neutral court, Delaware, is not a reason to reincorporate, period,” Elson said.
But that is what Musk set out to do, squaring in on Texas, where Tesla is headquartered. The state is also forming a business court system of its own to challenge Delaware’s reign as America’s corporate home.
“I think it would be rather insulting to Texas judges to suggest that they would have done something differently had they found the same facts,” Elson said. “You can’t go forum shopping, if you will, for a friendly judge, or if you do, it’s not the right thing to do.”
How does latest shareholder vote affect existing legal challenges?
Even if Tesla successfully reincorporates in Texas, that does not mean his current legal woes move with it. Tesla already vowed to keep the Delaware issue in Delaware, where Musk is appealing the original compensation decision.
“Originally, the only question on appeal was whether [the judge’s] original findings regarding 2018 were correct,” Tulane law professor Ann Lipton told SAN in an email. “Now, we have this new vote, with uncertain legal effect. [Judge] McCormick will decide it in the first instance: she’ll either say it cures the problem and the package is restored, or that it doesn’t. Whichever she decides, the loser will appeal.”
That makes Thursday’s victories more like moral victories for Musk. There is no guarantee the courts will approve his pay.
That pay package is worth considerably less than when the Delaware judge struck it down, too. Tesla’s share price is down more than 26% in 2024, bringing Musk’s pay package value down about $10 billion.
New Texas Stock Exchange takes on New York in stock market showdown
Texas is two-stepping on New York City’s territory with plans to open a competing stock exchange. TXSE Group announced Wednesday, June 5, that it raised $120 million in capital to start the Texas Stock Exchange. Financial heavyweights BlackRock and Citadel Securities backed the exchange.
Few buildings in New York are more iconic than the New York Stock Exchange, which is the largest stock exchange in the world by market capitalization and trading volume. Next in line is the Nasdaq, also headquartered in New York City. Texas wants to take them both on.
“TXSE will ultimately create more competition around quote activity, liquidity and transparency,” James Lee, founder and CEO of TXSE Group, said.
The Texas Stock Exchange would be a fully electronic, national securities exchange. The group said it plans to file registration documents with the U.S. Securities and Exchange Commission later this year.
A stock exchange is simply a marketplace where stock buyers connect with sellers. When a company goes public, it chooses what exchange to list with. But to get accepted at a particular exchange, the company has to follow the rules of that exchange and pay fees.
The Wall Street Journal said the proposed Texas Stock Exchange is “aiming to tap in to disaffection with increasing compliance costs at Nasdaq and NYSE and newer rules like one setting targets for board diversity at Nasdaq.”
TXSE Group said it believes it will be the most well-capitalized exchange entrant to file registration with the SEC. There used to be more regional exchange options, but most of those closed or folded into the effective duopoly of the NYSE and Nasdaq.
Once approved, TXSE will have the task of convincing companies to list on its exchange. According to Fortune, Texas is tied with New York for the second-most Fortune 500 companies headquartered in a state at 52. For the first time since 2014, California came out on top with 57.
Especially in recent years, Texas tried to entice more financial business to the state, whether it is companies moving headquarters there or reincorporating.
This year, Texas will launch a new business court system to challenge Delaware, America’s corporate home for more than a century. And they are doing so with a little public relations help from Elon Musk.
Is Elon Musk a threat to Delaware’s core business?
After a Delaware judge struck down Elon Musk’s $56 billion Tesla compensation package, Musk put the state in his crosshairs with a series of posts encouraging companies to flee America’s corporate kingdom, as he hopes to do with Tesla. Given Musk’s influence, are his actions a real threat to Delaware?
Around 2 million companies are incorporated in Delaware, including 68% of Fortune 500 companies. Incorporated businesses outnumber people in Delaware by a ratio of 2-to-1.
“The business of this state is corporate regulation; a good chunk of our tax revenue comes from that. It’s in the state’s interest to get the answer right,” said Charles Elson, a leading authority on corporate governance and founding director of the Weinberg Center for Corporate Governance at the University of Delaware.
The big reason so many companies choose to incorporate in Delaware is the Court of Chancery, Musk’s latest target.
Elson said Chancellor Kathaleen McCormick’s decision to void Musk’s CEO pay package is unusual and surprising but not unfounded.
“The judge’s concern was that the disclosure to the shareholders about this package was inadequate, that there are serious flaws she felt in the process, the independence of the directors, how the thing came together,” Elson said. “And she felt that had disclosure been more accurate, the shareholders may not have approved it.”
In 2018, 73% of shareholders approved the CEO’s pay package, excluding votes by Musk and his family. After hitting set targets in the coming years, the deal’s value hit around $56 billion, which McCormick called “an unfathomable sum.” That’s roughly the market cap of all of Tesla back when shareholders first approved the compensation plan. Tesla’s market cap is now more than 10 times that.
“Is it really, quote-unquote, a transfer of funds for services rendered? Or is it more of a gift?” Elson said. “The larger the amount becomes, the more questionable the compensation for services rendered becomes.”
Musk’s relations to Tesla directors questioned
McCormick cited Musk’s extensive ties to members of Tesla’s board of directors in her decision, questioning the board’s independence. Then, the Wall Street Journal published an exposé on the money and drugs that tie Musk to some directors.
Musk hit back at the newspaper, calling them liars and trash not fit to line a birdcage. He noted that he has passed every random drug test in the past three years as part of an agreement between NASA and SpaceX.
Since his court defeat, Musk has not only vowed to incorporate Tesla in Texas with shareholder approval but has strongly encouraged other companies to leave Delaware as well.
With 172 million followers on his platform X, it is realistic to question whether his influence will impact Delaware’s status as the country’s corporate paradise.
“I think whether you win or lose in Delaware, you do get a fair shake,” Elson said. “[Musk] didn’t seem too upset with Delaware when he won the Solar City case a few years ago.”
Why Delaware is the chosen state of incorporation
“The fundamental advantage is this judicial system and this body of very well-developed corporate law,” Elson said.
The Delaware Court of Chancery dates back to 1792 but didn’t hit its corporate stride until more than a century later. In 1899, Delaware copied favorable business laws from New Jersey, which at the time was the country’s de facto corporate home.
In 1913, future President Woodrow Wilson, then New Jersey’s governor, passed a series of laws perceived to be anti-business. In response, corporations fled across the river to Delaware, where they remain today.
“North Dakota has a corporate statute that some say is more shareholder-friendly than Delaware; Nevada has a corporate statute that some say is a little more managerial-friendly than Delaware,” Elson explained. “But you still haven’t seen a flocking of companies to those jurisdictions because a statute can’t lay out every rule and regulation for corporate conduct. It has to really be interpreted by judges through a common law process.”
In Delaware and its dedicated business court system lies a large body of precedent developed over many years, Elson said.
“There are not that many situations here that haven’t come up before,” he added.
But now Delaware is coming up against a CEO who happens to be one of the richest people in the world (Musk dropped to No. 2 on Forbes’ Billionaires List after his compensation package was voided). Now, Musk is looking to Texas for a fresh start.
“I think it would be rather insulting to Texas judges to suggest that they would have done something differently had they found the same facts. You can’t go forum shopping, if you will, for a friendly judge, or if you do, it’s not the right thing to do,” Elson said.
Musk eyeing Texas comes at an interesting time. Last year, Texas Gov. Greg Abbott signed a law to create specialty business courts to rival Delaware. But those courts won’t be in session until September 2024 at the earliest.
Supreme Court to hear arguments over Trump’s ballot eligibility: The Morning Rundown: Feb. 8, 2024
The case to keep former President Donald Trump off the ballot heads to the Supreme Court. And Disney has its sights set on the video game industry with an Epic announcement. These stories and more highlight The Morning Rundown for Thursday, Feb. 8, 2024.
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Trump and his team are arguing Section 3 does not apply to Trump for several reasons, saying the provision does not cover the president, that his actions leading up to and on Jan. 6, 2021, do not constitute an insurrection, and that Congress, not state or federal courts, enforces the clause.
As the future of the 2024 presidential election hangs in the balance, Trump’s name remains on the ballot in Colorado and Maine, where his candidacy is also being contested. Both sides have asked the court to move swiftly. When the justices issue their decision, it will be historic, as the Supreme Court has never before made a ruling directly concerning the 155-year-old clause.
Special counsel concludes investigation of Biden classified documents
A report is expected to be released soon to lawmakers and the public after the White House reviews it for potential executive privilege issues. Classified documents were found in Biden’s Washington D.C. office, which he used after serving as vice president, and at his home in Delaware.
The president has denied any wrongdoing. Multiple media outlets suggest Hur’s report is not likely to recommend any charges. Garland said he is committed to making as much of the report public as possible.
Senate Republicans block bipartisan bill on border security, foreign aid
Efforts to pass legislation over additional aid to Ukraine and Israel will continue in Congress on Thursday, Feb. 8. Senate Democrats plan to hold a vote to advance a standalone foreign aid bill after Republicans rejected the $118 billion bipartisan package that included immigration policies on Wednesday, Feb. 7.
Five Democrats joined the majority of Republicans in voting against the bill. Only 4 of the Senate’s 49 Republicans vote for it. Senate Republicans argued the bill did not do enough to address the border crisis, with former President Trump and House Speaker Mike Johnson both coming out against the package.
Officials said the latest strike was part of the retaliatory actions authorized by President Biden following the killing of three U.S. soldiers at a base in Jordan in January. In a statement, U.S. Central Command said the U.S. will continue to take “necessary action to protect our people.” It added there are “no indications of collateral damage or civilian casualties at this time.”
Search efforts on for 5 Marines on board missing helicopter found in California
Search and rescue efforts are well underway for five U.S. Marines in California after the helicopter they were in went missing during what the military called a routine training flight from Nevada to San Diego overnight on Tuesday, Feb. 6.
“All we know right now is that the search is ongoing for, for the helicopter and the crew,” National Security Council spokesman John Kirby said. “Obviously, our hopes are of the best here. But this was a MH-53, Marine Corps, MH-53, a large helicopter that was on its way from Creech Air Force Base to San Diego. And that’s really all we know. We’re watching this closely. And and again, our thoughts are for the best.”
According to the 3rd Marine Aircraft Wing, at around 1 a.m. on Wednesday, Feb. 7, the CH-53E Super Stallion helicopter was reported “overdue” at the Marine Corps Air Station Miramar in San Diego. The military announced that it located the aircraft but not the crew in a mountainous region at 9:08 a.m. on Wednesday, Feb. 7.
Local media outlets reported that the helicopter was located by a drone at 5,800 feet in a rugged area with the weather likely impacting rescue efforts from the ground. Heavy cloud cover on Wednesday morning, Feb. 7, prevented the local sheriff’s department from sending its helicopter up.
The California Department of Forestry and Fire Protection told CBS that nothing was located at the location, which is reportedly being hit with heavy snow. According to reports, before going missing, the helicopter’s last-known location was reported at 11:30 p.m. on Tuesday, Feb. 6. There is still no sign of the crew, President Biden has been briefed on the situation, according to a White House spokesperson.
