I seldom post two days in a row, let alone on the same subject, but I am intrigued by Elon Musk’s  10-year comp agreement at Tesla that can net him as much as $56 Billion dollars (see yesterday’s post).

In court yesterday we learned that the pay package was approved by an independent committee of the board.  Having an independent comp committee is pretty standard and in fact actually mandatory, although yesterday I had suggested also the hiring of recognized consultants who could relate the comp to peers; perhaps this was not done as Elon, self-admittedly, has no peers nor does his company fall into a peer group….

From a lawyering standpoint, which I admit is less titillating but more useful a focus, we should consider that independent director action typically enjoys immunity from analysis under the business judgment rule, which keeps courts out of the practice of second-guessing directors in the use of their business discretion.  However, such protection is not afforded to interested directors nor, as in this case, to allegedly coerced directors. Plaintiffs here suggest that Musk had such power that independence was compromised.

Another of the tid-bids as reported by Law360, a service sending prompt news items to attorneys: there is suggestion that Musk may be violating his acrimoniously reached settlement agreement with the SEC which among other matters required Musk to have his tweets first reviewed by company counsel (can one imagine how that requirement must rankle Musk to this day).

I promise to attempt to not post on this trial tomorrow; though I may not be able to resist.