Corporate Governance

On May 29, Exxon Mobil held its 2024 corporate election. Before the election, the company sued two investors over their proposal to include a commitment in its proxy statement to accelerate the company’s reduction of greenhouse gas emissions. Sarah Haan argues that the election and the lawsuit shed more light on current upheavals in corporate democracy than they do on the success of the ESG movement.

Matthias Breuer, Wei Cai, Anthony Le, and Felix Vetter find that gender minority representation on German works councils helps to improve worker welfare and productivity.

Lucian Bebchuk and Robert Jackson argue that the Tesla board’s prediction that restoring Musk’s old pay package would require no new compensation charge to Tesla’s financial statement seems not to have been based on any independent accounting advice. This could carry substantial risks for Tesla stockholders.

Lucian Bebchuk argues that, in response to the Delaware court decision invalidating the 2018 pay grant to Elon Musk, the Tesla board did not react with contrition and an attempt to improve its governance, but rather followed an approach of dismissal and defiance.

Lucian Bebchuk and Robert Jackson discuss how Tesla is failing to bolster director independence despite a highly critical court opinion.

Lucian Bebchuk and Robert Jackson argue that Tesla’s proposal to ratify Elon Musk’s $50 billion pay package would fail to secure Musk’s devotion of time and effort to Tesla rather than other endeavors, just as its past pay arrangement did.

Lucian Bebchuk and Robert Jackson discuss how Elon Musk’s threat to develop AI projects outside Tesla may distort investors’ votes on restoring his large options grant.

Michael Jensen, a leading late 20th century economist, pivoted from praising public companies in the 1970s to assailing public company governance in the 1980s and 1990s. Disappointment that corporate executives did much to thwart takeover activity prompted Jensen’s 180-degree turn. 

One of the questions that Elon Musk’s lawsuit against OpenAI and its CEO, Sam Altman, raises is whether Microsoft’s involvement in changes to OpenAI’s board in November violated nonprofit law. Benjamin Leff assesses this challenge and if current nonprofit law is capable of monitoring nonprofit behavior in its current form.

Two professors of law assess the merits and questions raised by Musk's recent lawsuit against OpenAI and its CEO, Sam Altman.