White House aims to shift cybersecurity burden from individuals and small businesses to tech providers
The White House released its long-awaited National Cyber Strategy on Thursday, providing a road map for how the Biden administration aims to defend the U.S. from a rapidly growing number of online threats.
A key element of the new framework involves shifting the burden of cybersecurity from individuals, small businesses and local governments and putting responsibility in the hands of software developers and other institutions with the requisite resources and expertise.
“The president’s strategy fundamentally reimagines America’s cyber social contract,” Acting National Cyber Director Kemba Walden said during a press briefing on Wednesday. “It will rebalance the responsibility for managing cyber risk onto those who are most able to bear it.”
Walden added, “the biggest, most capable and best-positioned actors in our digital ecosystem can and should shoulder a greater share of the burden for managing cyber risk and keeping us all safe.” She said that laying responsibility on individuals and groups who lack the resources to protect themselves is both “unfair” and “ineffective.”
The White House is proposing that legislation establish liability for software makers which fail to take reasonable precautions to secure their products and services. The administration said in its draft report that it would work with Congress and the private sector to develop the language of such a bill, which would include “an adaptable safe harbor framework” to protect companies that “securely develop and maintain their software products and services.”
A senior administration official, who wasn’t authorized to be named, said the legislation isn’t expected to pass in the next year, but is part of a longer-term plan.
The Biden administration said it will explore a national insurance backstop in the case of a catastrophic cyberattack to supplement the existing cyber insurance market. It will also focus on defending critical infrastructure by expanding minimum security requirements in certain sectors and streamlining regulations, and will treat ransomware as a national security threat, not just a criminal issue.
The strategy also includes an increased focus on incentivizing long-term investments into cybersecurity, even while dealing with urgent threats. The administration said it will prioritize cybersecurity research and development for newer technologies as well as invest in expanding the cyber workforce.
In addition, the framework calls for a focus on international partnerships to work with like-minded nations to fight threats and create secure global supply chains for communications technology and other kinds of tools and information.
The White House said the work has already started. In May 2021, for example, President Biden signed an executive order aiming to strengthen the nation’s cyber defenses. That was shortly after the cyberattack on Colonial Pipeline that led to widespread fuel shortages.
The order directed IT service providers to inform the government about cyberattacks that could effect national networks. It also created a Cybersecurity Safety Review Board consisting of officials from the public and private sector to analyze cyberattacks and make recommendations for future protections.
WATCH: Closing keynote: The White House is serious about cybersecurity
Dado Ruvic | Reuters
Dina Powell McCormick, who was a member of President Donald Trump’s first administration, has resigned from Meta’s board of directors.
Powell McCormick, who previously spent 16 years working at Goldman Sachs, notified Meta of her resignation on Friday, according to a filing with the SEC. The filing did not disclose why McCormick was stepping down from Meta’s board, but said her resignation was effective immediately.
Meta does not plan on replacing her board role, according to a person familiar with the matter who asked not to be named due to confidentiality. Powell McCormick is considering a potential strategic advisory role with Meta, but nothing has been decided, the person said.
Powell McCormick joined Meta’s board in April along with Stripe co-founder and CEO Patrick Collison. Meta CEO Mark Zuckerberg said in a statement at the time that the two executives “bring a lot of experience supporting businesses and entrepreneurs to our board.”
Powell McCormick served as a deputy national security advisor to President Trump during his first stint in office and was also an assistant secretary of state during President George W. Bush’s administration.
She is married to Sen. Dave McCormick, R-Pa, who took office in January.
Powell McCormick is the vice chair, president and head of global client services at BDT & MSD Partners, which formed in 2023 after the merchant bank BDT combined with Michael Dell’s investment firm MSD.
With her departure, Meta now has 14 board members, including UFC CEO Dana White, Broadcom CEO Hock Tan and former Enron executive John Arnold.
WATCH: TikTok signs joint venture to create TikTok USDS Joint Venture.
Technology
Musk’s $56 billion Tesla pay package must be restored as court rules cancellation was too extreme
Elon Musk‘s 2018 CEO pay package from Tesla, worth some $56 billion when it vested, must be restored, the Delaware Supreme Court ruled Friday.
“We reverse the Court of Chancery’s rescission remedy and award $1 in nominal damages,” the judges wrote in their opinion.
In the decision, the Delaware Supreme Court judges said a lower court’s decision to cancel Musk’s 2018 pay plan was too extreme a remedy and that the lower court did not give Tesla a chance to say what a fair compensation ought to be.
The decision on the appeal in this case, known as Tornetta v. Musk, likely ends the yearslong fight over Musk’s record-setting compensation.
Musk’s net worth is currently estimated at around $679.4 billion, according to the Forbes Real Time Billionaires List.
Dorothy Lund, a professor at Columbia Law School, told CNBC that while the Friday opinion may restore the 2018 pay plan for Musk, it leaves the rest of the lower court’s decision unaddressed and intact.
“The court had previously decided that Musk was a controlling shareholder of Tesla and that the Tesla board and he arranged an unfair pay plan for him,” she said. “None of that was reversed in this decision.”
“We are proud to have participated in the historic verdict below, calling to account the Tesla board and its largest stockholder for their breaches of fiduciary duty,” lawyers representing plaintiff Richard J. Tornetta said in an e-mailed statement.
Tesla did not immediately respond to requests for comment.
The Delaware Supreme Court issued the order per curiam with no single judge taking credit for writing the opinion and no dissent noted.
Musk’s 2018 CEO pay package from Tesla, comprised of 12 milestone-based tranches of stock, was unprecedented at the time it was proposed. After it was granted, the pay plan made Musk the wealthiest individual in the world.
Tesla shareholder Tornetta sued Tesla, filing a derivative action in 2018, accusing Musk and the company’s board of a breach of their fiduciary duties.
Delaware’s business-specialized Court of Chancery decided in January 2024 that the pay plan was improperly granted and ordered it to be rescinded.
In her decision, Chancellor Kathaleen McCormick also found that Musk “controlled Tesla,” and that the process leading to the board’s approval of his 2018 pay plan was “deeply flawed.”
Among other things, she found the Tesla board did not disclose all the material information they should have to investors before asking them to vote on and approve the plan.
After the earlier Tornetta ruling, Musk moved Tesla’s site of incorporation out of Delaware, bashed McCormick by name in posts on his social network X, formerly Twitter, where he has tens of millions of followers, and called for other entrepreneurs to reincorporate outside of the state.
Tesla also attempted to “ratify” the 2018 CEO pay plan by holding a second vote with shareholders in 2024.
In November, Tesla shareholders voted to approve an even larger CEO compensation plan for Musk.
The 2025 pay plan consists of 12 tranches of shares to be granted to the CEO if Tesla hits certain milestones over the next decade and is worth about $1 trillion in total. The new plan could also increase Musk’s voting power over the company from around 13% today to around 25%.
Shareholders had also approved a plan to replace Musk’s 2018 CEO pay if the Tornetta decision was upheld on appeal. That plan is now nullified.
As CNBC previously reported, a law firm that currently represents Tesla in this appeal penned a bill to overhaul corporate law in Delaware earlier this year. The bill was passed by the Delaware legislature in March, and if it had applied retroactively, it could have affected the outcome of this case.
Read the Delaware Supreme Court’s ruling here.
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