According to U.Today, Charles Hoskinson, the creator of Cardano, has shed light on a recent development involving Elon Musk and Tesla. Musk had an agreement with Tesla's board and shareholders that if he increased the company's value to a trillion dollars, he would receive a 5% commission. This deal was approved by 80% of the shareholders and the board, placing Musk in the exclusive 'trillion dollar club' of CEOs. However, a Delaware judge has since declared the compensation agreement void, awarding $5 billion to the attorneys who contested it in a lawsuit.
This unexpected turn of events has sparked discussions about legal justice and corporate governance. The judge's decision to declare the agreement invalid has raised questions about the validity of Delaware corporate agreements, despite seeming to align with the state's policies. The lawsuit argued that Musk's compensation, even with board and shareholder approval, was unreasonable and not in Tesla's best interest. This might not have been the case if Tesla had been headquartered in a different state.
Hoskinson pointed out that states like Wyoming could offer more stable and advantageous conditions for corporations. Wyoming has positioned itself as a business-friendly state with laws that are favorable to corporate operations. Despite the legal setback, Elon Musk remains one of the wealthiest individuals globally. However, it's important to note that a company's valuation does not equate to the actual liquid value of an entity or asset.
