MYTH VS FACT
Myth: SB 21 is necessary to prevent corporations from leaving Delaware.
Fact: There are more than 2 million companies incorporated in Delaware. For the past five years, including the last 12 months, 90% of IPOs are companies incorporated in Delaware. Over the past year, more companies have moved to Delaware than have left. Delaware has long been the gold standard for corporate law, providing both transparency and accountability. The whisper campaign behind SB 21 is not about keeping businesses in the state—it is about putting pressure on Delaware to give billionaire executives a license to steal from pensioners.
Myth: SB 21 only affects Delaware-based corporations.
Fact: Because so many corporations are incorporated in Delaware, SB 21 would have national implications, setting off a race to the bottom and a dangerous precedent for weakening shareholder protections across the U.S. All pensions and 401ks around the country will be harmed.
Myth: SB 21 will improve Delaware’s corporate legal system.
Fact: The bill would overturn decades of Delaware Supreme Court precedents that have made Delaware the leader in corporate governance. Instead of strengthening the system, SB 21 would create enormous uncertainty, weaken shareholder rights and reduce transparency, allowing corporate insiders to act in their own financial interests with little to no oversight. It is no accident that this bill was prepared by Elon Musk’s lawyers.
Myth: Small investors and union pension funds will not be affected by SB 21.
Fact: SB 21 gives corporate insiders a license to steal from all public investors, including small investors and union pension funds. This will result in a transfer of billions of dollars from public retirement savings to the pockets of corporate insiders and weakened protections against fraud and mismanagement.
Myth: SB 21 protects shareholder rights by modernizing corporate governance.
Fact: SB 21 would overturn decades of law and create enormous uncertainty for pensioners, judges, and anyone who tries to understand corporate law. There is a significant risk that Delaware lawyers will be less relevant and jobs will move out of state as investors look to incorporate companies elsewhere.
Myth: SB 21 is a fair and necessary response to changing business needs.
Fact: SB 21 was written by Elon Musk’s lawyers in direct response to Elon Musk’s failed $56 billion Tesla pay package, which was struck down by Delaware courts because the pay package was the result of blatant self-dealing by Elon Musk. Musk’s legal team admitted to writing it. This is not a neutral corporate governance update—it is a billionaire’s attempt to rewrite the rules to benefit himself and other wealthy insiders.
Myth: SB 21 maintains a balance between corporate leaders and stockholders.
Fact: The bill shifts power entirely in favor of billionaire insiders and corporate boards, making it nearly impossible for public stockholders to challenge self-dealing and conflicts of interest. This is not a balanced reform—it is a blatant power grab.