A progressive faction within the Delaware Democratic Party is backing primary challengers against six incumbent state lawmakers. These incumbents were instrumental in enacting legislation that significantly alters Delaware’s corporate law, a move critics argue primarily benefits corporate executives and ultra-wealthy individuals, including prominent figures like Elon Musk and Mark Zuckerberg, who have faced considerable shareholder litigation within the state.
The Delaware Working Families Party (WFP) has exclusively informed CNBC of its endorsement of six Democratic candidates poised to challenge sitting Democratic incumbents in upcoming primaries. These legislative efforts culminated in the passage of Senate Bill 21, which became law in 2025 and has been controversially labeled the “billionaires bill” by its detractors. The new law modifies the mechanisms through which corporations can utilize independent directors and other officials to secure judicial approval for their transactions. Crucially, it also imposes stricter limitations on the scope of documents shareholders can access when investigating potential corporate malfeasance.
Prior to the bill’s enactment, a significant coalition of institutional investors, legal scholars, and shareholder advocates voiced strong opposition, asserting that the legislation would disproportionately harm minority shareholders and empower boards and executives to prioritize their self-interest over the broader investor base.
Elon Musk, whose record-breaking $56 billion compensation package was once ensnared in legal challenges in Delaware, had previously relocated Tesla’s corporate domicile out of the state amidst the controversy. This move, alongside similar considerations by numerous other corporations, sent ripples through Delaware’s legislative bodies, as the state, despite its predominantly Democratic political landscape, has long been recognized as a favored jurisdiction for business incorporation.
The Working Families Party, a force in New York politics with a growing presence in other states, articulated that these endorsements are a strategic component of its broader objective to steer Delaware “more in the direction of working-class people.”
“We are committed to ensuring that the public understands the ramifications of this bill, both in terms of its impact on corporate accountability and its practical effect of essentially gifting Elon Musk billions of dollars, at a time when he was simultaneously spearheading efforts to dismantle federal agencies crucial for global humanitarian aid and initiating significant layoffs of Delaware residents,” stated Karl Stomberg, Delaware State Director for the Working Families Party, in an interview with CNBC.
Musk’s involvement with the Department of Government Efficiency (DOGE) last year, a White House initiative aimed at curbing federal spending, led to the disruption of numerous government agencies and widespread job losses among federal employees.
CNBC had previously reported that a Delaware corporate law firm representing Musk played a role in the drafting of SB21.
Specifically, the WFP is backing four candidates for the State House of Representatives and two for the State Senate, all of whom are challenging incumbent Democrats in their respective primary elections. The endorsed candidates include Shané Darby challenging Representative Nnamdi Chukwuocha, Rae Krantz running against Representative Debra Heffernan, Pamela Salaam facing Representative Frank Cooke, Will Imbrie-Moore competing against Representative Kim Williams, Adriana Bohm running against Senator Dan Cruce, and Shay Frisby in her race against Senator Ray Seigfried.
While the Delaware Supreme Court ultimately reinstated Musk’s compensation package, its decision was not predicated on the provisions of SB21.
Delaware Democrats who supported the corporate law overhaul, including Governor Matt Meyer, maintained that their motivations were not to facilitate payments to Musk. “The law was reformed because, upon assuming office, it became imperative to ensure that our legal framework and corporate jurisprudence remained predictable, transparent, and equitable,” Governor Meyer commented on CNBC’s “Squawk Box” last year. Meyer signed the bill into law following its unanimous passage in the State Senate and a 32-7 vote in the House.
Delaware’s approach to corporate law stands in contrast to potential legislative actions in other states. California voters, for instance, may consider the California Billionaire Tax Act in November, a proposal that would impose a one-time 5% tax on the total net worth of California tax residents with assets exceeding $1 billion. Unlike Delaware’s focus on corporate domicile, California’s initiative targets personal residency and wealth.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/21295.html
