- New York state officials are pressing Tesla to repeal a company bylaw that limits investors’ rights to sue Elon Musk’s automaker over breaches of fiduciary duty.
- Earlier this year, Tesla changed its bylaws to require stockholders to own a 3% stake to qualify to file a derivative shareholder suit.
- That followed Tesla’s decision to move its state of incorporation from Delaware to Texas.
In May, Tesla changed its corporate bylaws in a way that would require investors to own 3% of the stock, today worth about $30 billion, in order to file a derivative lawsuit against the company for breach of fiduciary duties. Authorities in New York State are now asking Tesla to delete the bylaw entirely.
Overseers of the New York State Common Retirement Fund, which owns about 0.1% of Tesla’s shares, submitted a formal proxy proposal and letter to the company on July 11, and shared it with CNBC on Wednesday. They say that Elon Musk’s automaker engaged in a “bait-and-switch” to convince shareholders to approve an incorporation move from Delaware to Texas in June 2024.
Source: https://www.cnbc.com/2025/07/16/tesla-change-to-limit-shareholder-suits-slammed-by-new-york-officials.html