Overview

• Tesla's new bylaw requires shareholders to own at least 3% of the company’s stock—worth approximately $34 billion—to file derivative lawsuits.
• The move leverages a recent Texas law allowing corporations to set ownership thresholds for such legal actions.
• Tesla relocated its incorporation from Delaware to Texas in 2024 after a Delaware court invalidated Elon Musk's $56 billion compensation package.
• Musk's appeal of the Delaware court's decision, filed in March 2025, is still pending before the Delaware Supreme Court.
• The bylaw change significantly raises the barrier for shareholder litigation compared to Delaware, where minimal holdings previously sufficed for lawsuits.