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Tesla lawyers ask Delaware judge to undo ruling against ginormous pay package for Musk

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Attorneys for Elon Musk and Tesla’s corporate directors are asking a Delaware judge to vacate her ruling requiring the company to rescind a massive and unprecedented pay package for Musk.

Friday’s hearing follows a January ruling in which Chancellor Kathaleen St. Jude McCormick concluded that Musk engineered the landmark 2018 pay package in sham negotiations with directors who were not independent. The compensation package initially carried a potential maximum value of about $56 billion, a sum that has fluctuated over the years but is now estimated to be worth more than $60 billion.

Following the court ruling, Tesla shareholders met in June and ratified Musk’s 2018 pay package for a second time, again by an overwhelming margin.

Defense attorneys say the vote makes clear that Tesla shareholders, with full knowledge of the flaws in the 2018 process that McCormick pointed out in her January ruling, are adamant that Musk is entitled to the 11-figure pay package.


Tesla shareholders meeting over Elon Musk’s compensation package

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“Honoring the shoulder vote would affirm the strength of our corporate system,” David Ross, an attorney for Musk and the other individual defendants, told McCormick. “This was stockholder democracy working.”

Ross told the judge that the defendants were not challenging the factual findings or legal conclusions in her ruling, but simply asking that she vacate her order directing Tesla to rescind the pay package.

McCormick, however, seemed skeptical of the defense arguments, peppering attorneys with questions and noting that there is no precedent in Delaware law for allowing a post-trial shareholder vote to ratify adjudicated breaches of fiduciary duty by corporate directors.

“This has never been done before,” she said.

Defense attorneys argued that while they could find no case that is exactly comparable, Delaware law has long recognized shareholder ratification as a cure to corporate governance errors, and has long acknowledged the “sovereignty” of shareholders as the ultimate owners of a corporation.


Elon Musk moving SpaceX from California to Texas

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“I candidly don’t see how Delaware law can tell the owners of the company that they’re not entitled to make the decision they made,” said Rudolf Koch, an attorney for Tesla.

Donald Verrilli, a lawyer for an induvial stockholder who owns more than 19,000 Tesla shares, suggested that it would be wrong for the lone shareholder who filed the lawsuit to thwart the will of the majority of Tesla shareholders. At the time the lawsuit was filed, the plaintiff owned just nine shares of Tesla stock.

“The voice of the majority of shareholders should matter…. This lawsuit is not representing the interest of the shareholders,” Verrilli said.

Thomas Grady, an attorney for a group of Florida objectors who own or manage almost 8 million Tesla shares with some $2 billion, argued that for McCormick to rule for the plaintiff, she has to “disenfranchise” all other Tesla shareholders.

Attorneys for the plaintiff, who are seeking unprecedented legal fees in the form of Tesla stock valued at more than $5 billion, were to argue their case Friday afternoon.



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Sean “Diddy” Combs taken into federal custody in New York

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Sean “Diddy” Combs has been taken into custody by federal authorities in New York, CBS News confirmed Monday night. 

In recent months, the hip-hop mogul has faced multiple accusations of sexual abuse and physical violence. In March, Combs’ homes in Los Angeles and Miami were raided by Homeland Security Investigations agents and other law enforcement officers due to a possible ongoing sex trafficking investigation, U.S. officials said at the time, but no charges were filed then. 

The charges against Combs on Monday were not immediately known. 

“We are disappointed with the decision to pursue what we believe is an unjust prosecution of Mr. Combs by the U.S. Attorney’s Office,” Marc Agnifilo, an attorney for Combs, said in a statement. “Sean ‘Diddy’ Combs is a music icon, self-made entrepreneur, loving family man, and proven philanthropist who has spent the last 30 years building an empire, adoring his children, and working to uplift the Black community. He is an imperfect person but he Is not a criminal. To his credit Mr. Combs has been nothing but cooperative with this investigation and he voluntarily relocated to New York last week in anticipation of these charges. Please reserve your judgment until you have all the facts. These are the acts of an innocent man with nothing to hide, and he looks forward to clearing his name in court.”

Combs has faced a number of lawsuits in recent months involving allegations of sexual misconduct and violence. Combs and his representatives have denied all the accusations. 

In May, Combs apologized for a security video aired by CNN that appeared to show him attacking Cassie, whose legal name is Casandra Ventura, in a Los Angeles hotel hallway in 2016. He said his behavior was “inexcusable” and he takes “full responsibility” for his actions.

This is a developing story and will be updated.

contributed to this report.



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White House seeks to boost Secret Service funds after 2nd Trump shooting

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White House seeks to boost Secret Service funds after 2nd Trump shooting – CBS News


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The Biden administration is asking Congress to increase Secret Service funding following Sunday’s apparent assassination attempt on former President Donald Trump. This request comes about two weeks before money for the federal government runs out. CBS News congressional correspondent Scott MacFarlane has the latest.

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9/16: The Daily Report with John Dickerson

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9/16: The Daily Report with John Dickerson – CBS News


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John Dickerson reports on the status of the investigation into Sunday’s apparent assassination attempt against former President Trump, TikTok’s appeal as it faces a possible ban in the U.S., and what’s on the campaign agenda with just 50 days to go until the election.

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