Tesla's change in bylaws to limit shareholder lawsuits slammed by New York state officials

Core Points - Tesla amended its corporate bylaws to require investors to own 3% of the stock, approximately worth $30 billion, to file a derivative lawsuit for breach of fiduciary duties [1] - New York State authorities are requesting Tesla to eliminate this bylaw entirely [1] - The New York State Common Retirement Fund, owning about 0.1% of Tesla's shares, submitted a formal proxy proposal against the bylaw [2] - Elon Musk's decision to move Tesla's incorporation from Delaware to Texas was perceived as a "bait-and-switch" tactic to gain shareholder approval [2] - This move followed a Delaware judge voiding Musk's $56 billion pay package, the largest in public company history [3] - Tesla claimed that stakeholders' rights would remain "substantially equivalent" under Delaware and Texas laws [3] - Texas changed its law to allow corporations to require 3% ownership for derivative suits, which Tesla's board then adopted [4][5] - The New York fund's letter criticized Tesla's actions as insulating directors from accountability and violating corporate governance principles [5][6] - The New York fund's overseers emphasized that derivative actions are essential for shareholders to enforce their rights [6]