Delaware Tempts Daktronics
Cumulative voting, Pimco vs. private credit, dumb rebalancing, antigravity propulsion, private jets to Ibiza and Strategy.
See, when I was a corporate lawyer, many years ago, I thought that big companies wanted to be incorporated in Delaware. Most of them were, and are, and Delaware is in the business of catering to them. “Catering to corporations” means mostly catering to corporate managers, to founders and chief executive officers and boards of directors and controlling shareholders, since they are the ones who make decisions about where the company will be incorporated. So Delaware offers an attractive package to managers. The package is, roughly:
Of these three things, the third strikes me as by far the most important. The particular mix of rules in Points 1 and 2 — what is and isn’t allowed — isn’t that important; every state offers some reasonable mix of managerial discretion and shareholder rights, and any company can adapt to any set reasonable set of rules. What matters is that you know in advance what the rules are, so you can plan for them.