Delaware and a Close Look at Independence
Key Takeaways A Delaware judge’s decision to void $55.8 billion in compensation for Elon Musk was a noteworthy event for shareholders and corporate issuers, not only regarding compensation, but also the complexities around evaluating director independence. Traditional measurements used by major exchanges and proxy advisors seem to show that board independence in the U.S. is […]
Posted by Subodh Mishra, ISS STOXX, on Monday, July 1, 2024
Editor's Note:
Subodh Mishra is Global Head of Communications at ISS STOXX. This post is based on an ISS-Corporate memorandum by Alyce Lomax and is part of the Delaware law series; links to other posts in the series are available here.
Key Takeaways
- A Delaware judge’s decision to void $55.8 billion in compensation for Elon Musk was a noteworthy event for shareholders and corporate issuers, not only regarding compensation, but also the complexities around evaluating director independence.
- Traditional measurements used by major exchanges and proxy advisors seem to show that board independence in the U.S. is robust, but some less obvious non-independent traits may lurk beneath the surface.
- Our research indicates that Delaware courts could more frequently consider non-traditional/nonfinancial factors in evaluating board independence, process, and fair dealings with shareholders than widely believed.
