Since Elon Musk became a great advisor to President Donald Trump, the policy of billionaire and the work that leads the government competence department has sparked a harsh reaction against his companies –Especially Tesla.
Peaceful protests It was organized In the agents of the electric car maker, but also it It was burnedShipping stations. adventurer Amazon The sellers are now producing hundreds of thousands per month Anti -colonist stickers For drivers of Tesla who bought the car before it became a political symbol. Despite a slight rise in the price of the auto company shares during the past week, Dog’s rise coincided with Stagnation In Tesla shares.
Amidst the anger at this unusual situation, Ann Lipton, Assistant Dean of Faculty Research at the Faculty of Law at the University of Toleen, says that she has provided questions from critics of musk about the legal ways to deter the CEO of focusing his energy on Washington and pushing him to work instead on strengthening the price of Tesla share. In short: Can the shareholders file a lawsuit?
It is a understandable question. However, the idea of prosecuting Musk about the losses of Tesla is also misleading, according to Lipton, who is looking at corporate governance and the role of companies in society. She says that a claim to shareholders against Musk will definitely fail.
Instead, she says luck, The shareholders have only two realistic options: try to go out or vote in new board members, or sell their shares.
Lipton wrote in a recent publication on the “regime” website based on the idea that lawsuits are the last resort to discipline the managers of rebel companies, not the first resort. Professors of Business Law.
Why don’t you sue?
Musk and Tesla Board have been sued by shareholders in the past. Recently, many claims of shareholders’ derivatives (which investors sue the company’s managers or officials on behalf of the company). She rolled in a big suit In the Chansri Court in Dilayer, where Tesla was previously combined. (It is now Integration In Texas.)
But Lipton argues that the issue that Moses is harmful to Tesla by working with Dog lacks the teeth because the plaintiffs will be severely pressed to prove that musk intends to harm Tesla.
She explained that any legal challenge will need to show that Musk, as a manager of companies, failed to show “the duty of care” and “the duty of loyalty” to the shareholders. Proof of the separation in his duty of care means proving that musk is acted with recklessness and “a conscious ignorance of the duties of the individual,” as I wrote. But there was no sign. Regarding his pursuit, she wrote: “He may blind the effects of his actions on the brand, but he did not start destroying them, nor does he ignore any specific action that he knows that it must be taken on behalf of Tesla.”
Regardless of the prosecution of musk, the prosecution of the painting will not work either. Corporate Law is not designed to allow the shareholders to prosecute when they disagree with the decision -making panels on how to manage business. The shareholders can only prosecute it only when they believe that the Board of Directors has failed to provide appropriate oversight.
Tesla plate, which includes Misk brother KimalHe faced criticism for being Very comfortable With the CEO, but this is not the same to show the lack of goodwill in governance options, Lipton says. In fact, the Board of Directors revealed in SEC files, including its latest The annual reportThe company “relies heavily” on musk, but it “does not devote its full -time and interest in Tasla.”
“This is the price you pay for Elon Musk as CEO.” luck.
In a legal challenge, you will not be able to show that Tesla’s managers do not pay attention, as they continue. “They may be legally believed that there is not much discipline that they can practice musk, or they may think legally that this may succeed for the advantage of Tesla, and that there is a closer musk to power.” “These are the provisions that the council is entitled to make.”
The turning point
Although the lawsuits filed against Elon Musk or Tesla Council are not initially, there are other methods that the shareholders can express their dissatisfaction.
The stock owners always have the option to vote against the members of the Board of Directors at the annual meeting of the company, or they are combined together to the stage a The Battle of the agent Lipton says, to put their choice for managers on the blackboard.
There is also a much simpler option: stripping their shares in the company as a form of protest. (A. Danish pension fundFor example, I took this step recently.)
Unlike institutional investors who feel Some pressure To drop the shares of Tesla, retail investors Loyalty showed Supporting musk during the past few weeks. Tim Rolley, professor of strategic management at Rutman College of Administration at the University of Toronto, who is believed to be uniquely vulnerable to the retail investor revolution at the University of Toronto, who believes that Tesla is uniquely vulnerable to the retail investment revolution, given the higher percentage of shares owned by individual buyers.
It indicates that many Tesla car owners who buy anti -Muslim stickers are also shareholders. Rolley points to the past Mimi rebellions It controls it Gamestop And AMC trading as an example of what can happen, if Musk fans operate it and if their stopping has reached a turning point.
“When they behave,” says about individual shareholders.
This story was originally shown on Fortune.com
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2025-03-28 18:10:00
