In a stunning turn of events, Delaware denies Elon Musk’s pre-approved compensation package.

It had been established by the board of Tesla that if Musk was able to achieve a series of nearly impossible accomplishments, that he would be allowed to buy 55 billion dollars worth of stock options. This is an unusually large compensation package, but on the other hand, Tesla has had unusually large growth since the agreement was put into place back in 2018.

The complaint comes from Richard J. Tornette. He is a shareholder who allegedly holds only nine shares. Apparently, he has a history of buying low quantities of shares in companies, and then bringing suit against those companies. In his current lawsuit with Musk, he is claiming that the agreement between Musk, and the Tesla board was unfair.

And in a stunning ruling, Judge Kathaleen McCormick, graduate of Havard and Noter Dame Universities, called the deal, “an unfathomable sum.”

	The incredible size of the biggest compensation plan ever, an unfathomable sum, seems to have been calibrated to help Musk achieve what he believed would make a good future for humanity,
	Judge Kathaleen McCormick

It should also be noted that Judge Kathaleen McCormick has been involved with Musk before in the court case Twitter v. Musk.

Of course, Musk and his team will be appealing this decision, but the damage has already been done.

This is another situation where the government has overreached traditionally held laws to meddle in the affairs of business.

It has been well established that if you are forming a national based or international company there are only a few states where you might choose to headquarter your company. It is important to have your company located in a state with favorable laws and regulations that will protect the company and the stockholders.

With the Trump Real Estate decision in Manhattan, New York managed to put themselves at the very bottom of the list. They made it clear that they have no interest in protecting the company, the management, or the stockholders, making them officially the worst state to base your company in.

But this decision by Judge Kathaleen McCormick, suddenly makes them a strong contender for second worst state in the country to locate your business.

Delaware has been at the top of that list for decades, followed by Nevada, Texas, Florida, and Wyoming.

But is yet another situation where the state overlooks the precedent, they overlook the reputational damage to the state and make an unprecedented ruling. A ruling that is designed to damage the CEO of a tremendously successful company. But a decision that will likely have a bigger impact on the state.

Delaware is not a large state, and they do not have much manufacturing or exports to other states. Beyond their reputation as a business friendly state, they really have nothing much to offer. The entire state’s economy is built around this singular advantage they built for themselves. Delaware gains greatly from this due to the billions of corporate dollars that run through their state each month. And their reputation is that they stand with and protect companies who choose to incorporate in their state.

With this one decision, Judge Kathaleen McCormick shot at Tesla, a company that chose to partner with the state of Delaware, directly in the back. What sort of message could she possibly think this sends to every other company in the state?

Perhaps it comes from jealousy? Or perhaps it was because Musk emerged successfully from Twitter v. Musk. Or perhaps they are actually nothing more than incompetents. But it seems clear in this case Judge McCormick couldn't see past the money involved in the actual matters of the case.

But the fact remains, here are two Democrat controlled states who have overreached the law to cause damage to companies within their state. Which starts to give us a pretty clear picture. If you want to incorporate, you now have three choices. Texas, Florida, or Wyoming.

Thanks to the hard work of Judge Kathaleen McCormick, Delaware will never be the same.