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• Delaware Chancery Court Judge Kathaleen St. Jude McCormick has blocked Elon Musk’s US$55.8 billion pay package, which Tesla’s board of directors approved in 2018 through a process she found to be “deeply flawed.” No CEO of a publicly traded U.S. company has ever been paid this much for one year’s work, according to Equilar, which tracks corporate leadership data.
• Pay for the 10 highest-paid executives, including Google’s Sundar Pichai and Apple’s Tim Cook, reportedly maxed out at around $250 million in 2022.
• The Conversation asked Justin P. Klein, the director of the Weinberg Center for Corporate Governance at the University of Delaware, to explain McCormick’s reasoning.

Why did the judge block Musk’s pay package?

• This legal defeat may have knocked Musk out of his perch atop the Forbes list of the world’s richest people, making him the second-wealthiest, the media outlet calculated.
• Ultimately, she determined that Musk’s compensation plan was considered and approved by a board of directors that was not sufficiently independent or objective.
• This pay package deserved close scrutiny because of its enormity, McCormick observed.

What was wrong with Tesla’s board?

• The board approved this compensation plan without following commonly accepted norms, according to the ruling.
• Further, McCormick found that the directors allowed Musk to control the process for approving the compensation plan, dictating the terms, amount and timing.
• This is both inconsistent with widely accepted compensation setting practices and striking due to the scale of the pay package.

What factors are boards supposed to consider in setting CEO pay?

• In deciding what CEOs should earn, boards or compensation committees should consider the company’s performance under the leadership of the CEO and the executive’s own personal performance.
• They should also review what comparable companies take into consideration when making decisions about their own CEO’s compensation.
• It also required the appointment of two new independent Tesla board members and a requirement that he preclear certain public statements.
• The board could have considered this incident a negative factor when making its decisions about Musk’s compensation.

What process are boards supposed to follow in setting CEO pay?

• In setting CEO compensation, all members of boards or compensation committees should be truly independent and objective, with no interest in the outcome.
• They should consider engaging compensation experts and benchmark or seek information on executive compensation at comparable companies.

What happens now?

• On the other hand, Musk could ask Tesla’s board, its compensation committee – or both of them – to revisit and revise his compensation plan, taking into account the objections spelled out in the ruling.
• That would include both the amount – $55.8 billion – and the process by which it was set.
• Even if Musk were to prevail and change Tesla’s jurisdiction of incorporation, it would not be likely to affect this decision.

Is Delaware particularly tough on corporate leaders?

• Delaware is the corporate home of more than 60% of Fortune 500 companies even though it’s the country’s second-smallest state.
• Musk’s court case was heard in its Court of Chancery, a system that primarily decides corporate legal matters.
• In 2005, Chancellor William B. Chandler III of the Delaware Chancery Court let it go, while acknowledging the apparent impropriety of paying an executive so much.

Justin P. Klein directs the advisory board of the Weinberg Center for Corporate Governance. Chancellor Kathaleen McCormick is an ex officio member of that center's advisory board.

• Billie Eilish (Interscope) was awarded Song of the Year and Best Song Written for Visual Media for "What Was I Made For?".
• Boygenius (Interscope) won three Grammys including Best Alternative Music Album for The Record, and Best Rock Performance and Best Rock Song for "Not Strong Enough."
• John Williams' "Helena's Theme" (Disney) won Best Instrumental Composition, and The String Revolution featuring Tommy Emmanuel (CIA Records) won Best Arrangement, Instrumental or A Cappella.
• Written In Their Soul: The Stax Songwriter Demos (Concord) won Best Historical Album and Best Album Notes.

• His dedication to the craft of dressmaking and tailoring was fostered by his seamstress mother and acknowledged by local Spanish aristocracy who recognised his talents.
• A marquesa’s patronage led to a tailoring apprenticeship in San Sebastián, where he opened his first dressmaking business in 1919 at the age of 24, and later an atelier in Madrid.

• Balenciaga’s life and work are currently being explored in a six-part Spanish biographical drama on Disney+.
• The new Disney series stars Alberto San Juan as Balenciaga and is structured around the designer recalling the events of his life and career during a rare interview in 1971 with the Times’ fashion editor Prudence Glynn (Gemma Whelan).

Fashion for a post-war world

• In episode two – The Occupation – when Balenciaga’s nervous investor visits Chanel to ask if the designer can succeed in Parisian high fashion, her famous response is resounding: “Cristóbal is the only authentic couturier amongst us.
• The rest, we are simply just fashion designers.” The series follows the turbulent political and economic times for fashion in the mid-20th century.
• Meanwhile, artisanal couture traditions of fashion design had to contend with the rise and expansion of the mass manufacturing of prêt-à-porter (ready-to-wear) fashion.
• The emerging prêt-à-porter designers, many of whom he mentored, carried his design principles into their luxury mass-manufactured clothing lines, including Givenchy, André Courrèges and Emanuel Ungaro.

Industry and passion

• Balenciaga’s magic is grounded in driven, tireless dedication to an art form.
• Everywhere we see hands, tools, textiles manipulated, cut, folded, sewn, adjusted, and eventually formed on a body ready to be seen and, ultimately, sold.
• However, he states: “It wasn’t just a business, it was part of me, like an extension of my body.

• An important character throughout the series is Carmel Snow (Gabrielle Lazure), the fashion chief of the American edition of the highly influential lifestyle magazine Harper’s Bazaar.
• This series is testament that designing, making and promoting dress will always involve passion and drama.

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Elizabeth Kealy-Morris does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

• To commemorate Groundhog Day, Lay’s® and Disney Advertising signed a unique sponsorship deal for eight custom ads, produced by Maximum Effort and KIMMELOT, set to run on ABC on Friday, February 2.
• View the full release here: https://www.businesswire.com/news/home/20240201355503/en/
  Lay’s serves as the sole sponsor of the Groundhog Lay’s® activation, marking the first time Disney has offered an exclusive sponsorship opportunity featuring a brand suite across an entire day.
• The ads will air during ABC’s ‘Good Morning America;’ ‘GMA3;’ ‘General Hospital;’ ‘Shark Tank;’ ‘20/20;’ and ‘Jimmy Kimmel Live’ on February 2.
• The spirited creative endeavor was developed in collaboration with Ryan Reynolds’ production and marketing company, Maximum Effort and Jimmy Kimmel’s creative lab, KIMMELOT.