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Reuters
25-03-2025
- Business
- Reuters
Delaware lawmakers to vote on corporate bill critics call giveaway to billionaires
Summary Companies Bill aims to stop firms leaving Delaware for other states Critics label it a "billionaire's bill" benefiting shareholders Opposition includes shareholder attorneys, pension fund managers WILMINGTON, DEL., March 25 (Reuters) - Delaware lawmakers are scheduled to vote on Tuesday to overhaul the state's corporate law to keep powerful business leaders like Mark Zuckerberg from moving their companies' legal home to another state, although opponents call it a giveaway to billionaires. The law, known as SB 21, is on the agenda for the Delaware House session that begins at 2 p.m. ET (1800 GMT) on Tuesday, where it must receive approval from two-thirds of the chamber's members. The bill has already been approved by the Delaware Senate and Governor Matt Meyer said he will sign it. The bill mostly impacts companies with a controlling shareholder, like Meta Platforms, which is controlled by Zuckerberg. The proposal provides steps for arranging deals between a company and its controlling shareholder, such as selling corporate assets to the controller, that cannot be challenged in court by the company's other investors. It also applies to deals between the company and board members and executives. Leaders of both parties sponsored the bill in the hopes of preventing "DExit" -- or a stampede of companies moving their legal home out of one of the country's smallest and least populated states. While other states are trying to attract corporations, Delaware still remains home to most large public companies in part because its corporate law protects board directors from being sued if they are independent and act in the company's best interest. Fees from chartering businesses generate more than 20% of Delaware's budget revenue. Several companies, mostly with controlling shareholders, have said they might or will leave Delaware, including Dropbox (DBX.O), opens new tab, Meta Platforms, opens new tab (META.O), opens new tab, Tripadvisor (TRIP.O), opens new tab and President Donald Trump's media company. On Friday, Simon Property Group (SPG.N), opens new tab, which is not a controlled company, asked its shareholders to approve moving the real estate investment trust's legal home to Indiana, where it has its headquarters, from Delaware. REITs like Simon tend to be chartered outside of Delaware. The proposed legislation has been labeled the "the billionaire's bill" by critics, which include attorneys for shareholders and managers of pension funds. The annual process to amend Delaware's corporate law rarely attracts attention but this year has been marked by high-profile opposition ads showing Elon Musk waving a chainsaw. The International Corporate Governance Network, which says its members manage more than $90 trillion in assets, warned lawmakers in a letter earlier this month the bill could have "significant negative implications for long-term returns for investors, including people saving for their retirements." Delaware Representative Madinah Wilson-Anton, a member of the majority Democratic Party, told the Breaking Points podcast on Friday that her "email inbox is unusable because I've gotten so many emails from constituents that are telling me to vote no." The bill prevents shareholders from challenging deals that are approved by a board committee that has a majority of independent directors or by a vote by public shareholders. The bill also limits records available to shareholders who want to investigate a deal for conflicts. Corporate leaders have expressed frustration in recent years over court rulings that upset certain expectations about the state's law. Tech billionaire Elon Musk fueled the debate last year by urging companies to follow Tesla (TSLA.O), opens new tab and leave the state after a Delaware judge rescinded his $56 billion pay package as CEO of the electric car maker.
Yahoo
19-03-2025
- Business
- Yahoo
Delaware's status as corporate capital might be on the line in a fight over shareholder lawsuits
HARRISBURG, Pa. (AP) — Delaware is trying to protect its status as the corporate capital of the world amid fallout from a judge's rejection of billionaire Elon Musk 's landmark Tesla compensation package, although critics say fast-tracked legislation will tilt the playing field against investors, including pensioners and middle-class savers. A Delaware House committee was expected to vote Wednesday on the bill, which is backed by Democratic Gov. Matt Meyer who says it'll ensure the state remains the "premier home for U.S. and global businesses' to incorporate. Backers say it'll modernize the law and maintain balance between corporate officers and shareholders in a state where the courts, for a century, have settled all sorts of business disputes as the legal home of more than 2 million corporate entities, including two-thirds of Fortune 500 companies. Critics — including institutional investors, pension funds and asset managers — say it'll lower corporate governance standards, curb shareholder rights and, as a result, limit the ability to hold corporate officers accountable for decisions that violate their fiduciary duty. The bill passed the state Senate unanimously last week. What happened in Elon Musk's case? A Delaware judge last year invalidated Musk's compensation package from Tesla that was potentially worth more than $55 billion. Lawyers for shareholders had sued over the package that Tesla's board of directors awarded Musk in 2018. Chancellor Kathaleen St. Jude McCormick said it was developed by directors who weren't independent of Musk and approved by shareholders who had been given misleading and incomplete disclosures in a proxy statement. The ruling bumped Musk out of the top spot on Forbes' list of wealthiest people, although he has since climbed back up. Musk and Tesla are appealing in the state Supreme Court. But Musk unloaded on Delaware, saying 'Never incorporate your company in the state of Delaware' and instead recommended competitors Nevada or Texas as destinations. Now, lawmakers are being warned by corporate lawyers that their clients are considering heading to the exits — making a 'Dexit,' as it's been dubbed — and that startups are being advised to incorporate elsewhere. What did Musk and others do? Must took his own advice, moving Tesla's corporate listing to Texas after a shareholder vote and his companies SpaceX to Texas and Neuralink to Nevada. Backers of the bill say corporate unrest had been simmering the past couple years over various Delaware Supreme Court decisions in corporate conflict-of-interest cases and that Musk inflamed the discontent. The fallout seemed to accelerate in recent weeks when the Wall Street Journal reported that Meta Platforms — the parent company of social media platforms Facebook, Instagram and WhatsApp — was considering moving its incorporation to Texas. Meta didn't confirm the report. DropBox, the online file-sharing platform, moved its corporate listing to Nevada, and Bill Ackman, founder of Pershing Square Capital Management, a major hedge fund, said he'd leave Delaware, too. On Feb. 1, Musk took to his social media platform X to crow about it, saying, 'Companies are flooding out of Delaware, because the activist chief judge of the Delaware court has no respect for shareholder rights.' That said, critics of the bill say there's no evidence that corporations are fleeing Delaware in any numbers. What does the bill do? It changes several things. One, it gives corporations more protections in conflict-of-interest cases — such as a pay package for a CEO or intercompany agreements — in state courts when fighting shareholder lawsuits. Two, it limits the kind of documents that a company must produce in court cases and makes it harder for stockholders to get access to internal documents or communication that could prove time-consuming and expensive for a company to produce — not to mention, damaging to its case. Eric Talley, a Columbia University law professor, has compiled a running list of three dozen Delaware Supreme Court precedents that the legislation stands to change. Lawrence Hamermesh, a former professor at Widener University's Delaware Law School, disagreed. Hamermesh, who helped draft the legislation after Meyer asked him last month, said perhaps only a couple doctrines would be wiped out. A legal challenge is widely expected should Meyer get the bill and sign it into law. Meanwhile, institutional investors say such a law may prompt them to push corporations that they own to incorporate elsewhere. Why is this a big deal for Delaware? Money. Approximately one-third of Delaware's state government revenue — about $2.2 billion — comes from corporate license fees and associated tax revenues, according to the governor's office. That helps the state to maintain a 0% sales tax and keep property taxes relatively low, a nice perk for the beach vacation home industry along its Atlantic coast. Beyond that, Wilmington is home to a cottage industry that caters to the corporate lawyers who live, stay, dine and shop around the state Supreme Court and the Chancery Court of Delaware buildings where they argue their cases. __ Follow Marc Levy on X at: Sign in to access your portfolio
Associated Press
19-03-2025
- Business
- Associated Press
Delaware's status as corporate capital might be on the line in a fight over shareholder lawsuits
HARRISBURG, Pa. (AP) — Delaware is trying to protect its status as the corporate capital of the world amid fallout from a judge's rejection of billionaire Elon Musk 's landmark Tesla compensation package, although critics say fast-tracked legislation will tilt the playing field against investors, including pensioners and middle-class savers. A Delaware House committee was expected to vote Wednesday on the bill, which is backed by Democratic Gov. Matt Meyer who says it'll ensure the state remains the 'premier home for U.S. and global businesses' to incorporate. Backers say it'll modernize the law and maintain balance between corporate officers and shareholders in a state where the courts, for a century, have settled all sorts of business disputes as the legal home of more than 2 million corporate entities, including two-thirds of Fortune 500 companies. Critics — including institutional investors, pension funds and asset managers — say it'll lower corporate governance standards, curb shareholder rights and, as a result, limit the ability to hold corporate officers accountable for decisions that violate their fiduciary duty. The bill passed the state Senate unanimously last week. What happened in Elon Musk's case? A Delaware judge last year invalidated Musk's compensation package from Tesla that was potentially worth more than $55 billion. Lawyers for shareholders had sued over the package that Tesla's board of directors awarded Musk in 2018. Chancellor Kathaleen St. Jude McCormick said it was developed by directors who weren't independent of Musk and approved by shareholders who had been given misleading and incomplete disclosures in a proxy statement. The ruling bumped Musk out of the top spot on Forbes' list of wealthiest people, although he has since climbed back up. Musk and Tesla are appealing in the state Supreme Court. But Musk unloaded on Delaware, saying 'Never incorporate your company in the state of Delaware' and instead recommended competitors Nevada or Texas as destinations. Now, lawmakers are being warned by corporate lawyers that their clients are considering heading to the exits — making a 'Dexit,' as it's been dubbed — and that startups are being advised to incorporate elsewhere. What did Musk and others do? Must took his own advice, moving Tesla's corporate listing to Texas after a shareholder vote and his companies SpaceX to Texas and Neuralink to Nevada. Backers of the bill say corporate unrest had been simmering the past couple years over various Delaware Supreme Court decisions in corporate conflict-of-interest cases and that Musk inflamed the discontent. The fallout seemed to accelerate in recent weeks when the Wall Street Journal reported that Meta Platforms — the parent company of social media platforms Facebook, Instagram and WhatsApp — was considering moving its incorporation to Texas. Meta didn't confirm the report. DropBox, the online file-sharing platform, moved its corporate listing to Nevada, and Bill Ackman, founder of Pershing Square Capital Management, a major hedge fund, said he'd leave Delaware, too. On Feb. 1, Musk took to his social media platform X to crow about it, saying, 'Companies are flooding out of Delaware, because the activist chief judge of the Delaware court has no respect for shareholder rights.' That said, critics of the bill say there's no evidence that corporations are fleeing Delaware in any numbers. What does the bill do? It changes several things. One, it gives corporations more protections in conflict-of-interest cases — such as a pay package for a CEO or intercompany agreements — in state courts when fighting shareholder lawsuits. Two, it limits the kind of documents that a company must produce in court cases and makes it harder for stockholders to get access to internal documents or communication that could prove time-consuming and expensive for a company to produce — not to mention, damaging to its case. Eric Talley, a Columbia University law professor, has compiled a running list of three dozen Delaware Supreme Court precedents that the legislation stands to change. Lawrence Hamermesh, a former professor at Widener University's Delaware Law School, disagreed. Hamermesh, who helped draft the legislation after Meyer asked him last month, said perhaps only a couple doctrines would be wiped out. A legal challenge is widely expected should Meyer get the bill and sign it into law. Meanwhile, institutional investors say such a law may prompt them to push corporations that they own to incorporate elsewhere. Why is this a big deal for Delaware? Money. Approximately one-third of Delaware's state government revenue — about $2.2 billion — comes from corporate license fees and associated tax revenues, according to the governor's office. That helps the state to maintain a 0% sales tax and keep property taxes relatively low, a nice perk for the beach vacation home industry along its Atlantic coast. Beyond that, Wilmington is home to a cottage industry that caters to the corporate lawyers who live, stay, dine and shop around the state Supreme Court and the Chancery Court of Delaware buildings where they argue their cases. __
Yahoo
27-02-2025
- General
- Yahoo
Delaware House Representative Kendra Johnson's service came from divine inspiration
Kendra Johnson is one of USA TODAY's Women of the Year, a recognition of women who have made a significant impact in their communities and across the country. The program launched in 2022 as a continuation of Women of the Century, which commemorated the 100th anniversary of women gaining the right to vote. Meet this year's honorees at For Delaware House Representative Kendra Johnson, it all started with a seed. When she was 14 years old in Chester, Pennsylvania, she says a divine presence came and planted a seed 'in [her] spirit and in [her] heart,' telling her that she would help uplift others in a crucial field: politics. Needless to say, she was confused. 'I'm dealing with all of this stuff that young teenage girls deal with related to self-esteem and worth and looking awkward,' Johnson said. 'So why on earth … would he give me such a dream?' Related: Meet the freshman class. 6 new faces headed to Delaware's House of Representatives From a young age, Johnson knew helping people was her passion. Seeing how her extended family would constantly support one another inspired her to help those in need, eventually leading her to executive director of the organization Elwyn. And even though the dream planted in her all those years ago would still pop back up now and again, Johnson continued to brush it away. But, as she explained, the universe had other plans – mainly, then-state House Representative Melanie George Smith announcing she would not be seeking reelection. Upon hearing this, Johnson felt that same presence reappear, urging her to take a chance and follow this new path. A path she could no longer ignore. 'I just had to stop and listen – stop brushing it off,' Johnson said. Johnson is Delaware's honoree for this year's USA TODAY's Women of the Year program. Since coming into office in 2018, Johnson has made it her mission to better the lives of her fellow Delawareans, leading the charge on several pieces of legislation. Inspiring Women Across America: Meet 2024 Women of the Year 2004 Honoree from Delaware: Pam Cornforth of Wilmington's Ronald McDonald House is Delaware's Woman of the Year In 2024, Johnson was the primary sponsor behind House Bill 374, which sought to codify protections for Delawareans' access to fertility services and technologies, including in vitro fertilization. This bill was personal for Johnson, who previously had undergone IVF treatment herself and sought to ensure that physicians providing these same services – and, in turn, the families who receive them – would be protected. 'And without access to that [IVF], I would not be a mom – and I wanted to be a mother,' Johnson said. 'And so I wanted the physicians to have the safeguards that they needed so that they could continue to do the great work that they do.' The bill was signed into law by then-state Governor Carney in September. (Johnson's physician, Dr. Larry Barmat, was among those present.) From pushing for the passage of landmark legislation to serving on a wide range of committees, Johnson has sought to use her position to help uplift those around her. In other words, she continues to let that seed inside her blossom. During our time together, Johnson spoke about the people and experiences that shaped her, what she is most proud of and how she overcomes whatever challenges come her way. My paternal grandmother, who raised me from 14 to 22 [years old]. I say that, not only because of the sacrifice – like what senior citizen wants to take on the responsibility of raising teenagers; like that is huge? – but she did that; she made that sacrifice out of love. One of the things that my grandmother did that certainly changed the trajectory of my life is when I was 22 years old … I got up one morning and my grandmother says to me, 'OK, Kendra, we're going to school.' I didn't know what she was talking about … My grandmother drove us to Delaware County Community College, she's like, 'You're going to take the placement testing and you're going to sign up for college courses,' and she stayed there with me all day while I did that … and because she did that, she believed in me, and it changed my whole life about who I am and who I could become. I define courage as faith – faith because, without faith for me, I would not have had the courage to do many of the things I have done in my life. It is my faith that provides me with the courage to step out. There's a whole lot of things that guide me. This is on my calendar, and it pops up every single day at 12 o'clock in the afternoon. It says, 'Be unafraid of the judgement of others. Be bold and courageous.' Because the judgement of others is what stops us – it's what creates fear. It makes you immobile, but once you are not afraid of that, you can be bold and courageous. My daddy always says this: Adversity breeds character. He always says that because … when you're in those moments and those tough times that show you who you really are. So, who I really am, as it relates to adversity, is that I work to be very thoughtful and understanding – that I might believe and feel all this stuff based upon my own experiences, but my experiences may differ from others. So, that's the first thing: just to be thoughtful and understand that we all come from different places – and with that, to reflect on what that might be and then be open to listening, even if I don't agree to be open. The younger Kendra – 14-year-old little Black girl from Chester, low self-esteem; no confidence; didn't believe in herself; didn't think she was smart or worthy or worth being loved … suffering from depression and suicidal ideation – I would say to that little girl, you are worthy; you are loved; and believe it or not, your life is going to be interview has been shortened for clarity. Olivia Montes covers state government and community impact for Delaware Online/The News Journal. You can reach her at omontes@ This article originally appeared on Delaware News Journal: Kendra Johnson of Delaware is named USA Today Women of the Year honoree
