Elon Musk's $55B Tesla Pay Package Voided by Judge(bloomberg.com)
bloomberg.com
Elon Musk's $55B Tesla Pay Package Voided by Judge
https://www.bloomberg.com/news/articles/2024-01-30/elon-musk-s-55-billion-tesla-pay-package-voided-by-judge
155 comments
Indeed her decision rests on that finding.
But according to the opinion, the issue was not what was included in the proxy statement, but what was left out. For example, details about those directors and their relationship with the CEO. Was that intentional?
Call me crazy, but having the CEO's divorce lawyer as the General Counsel is impossible to ignore as a potential red flag. Why. There are only so many reasons he would be given the job and most of them are problematic. Was he in charge of preparing this proxy statement.
But according to the opinion, the issue was not what was included in the proxy statement, but what was left out. For example, details about those directors and their relationship with the CEO. Was that intentional?
Call me crazy, but having the CEO's divorce lawyer as the General Counsel is impossible to ignore as a potential red flag. Why. There are only so many reasons he would be given the job and most of them are problematic. Was he in charge of preparing this proxy statement.
https://en.wikipedia.org/wiki/Kathaleen_McCormick
Interesting context. (Note: I'm not from USA)
Interesting context. (Note: I'm not from USA)
Did it have a material change on the outcome of the vote? Even if the committee was designated as not independent and fully biased, the board went alone with it and the shareholder approved. The deal was clear – Tesla hits very ambitious goals, Musk gets crazy amount of money. The fact that a judge can come in and completely reverse such a decision is mind blowing and seems more like a judicial activism.
It's a public company, not Musk's piggybank. This is a common fraud of senior management with too much control. The CEO, major shareholders and the board cannot tunnel assets out of a business due to improper relationships and defraud minor shareholders.
Note that board has always been given compensation way out of line with any business ever before and it has been notably spineless through Musk's fraud convictions, impregnation of co-workers, pedo-gate abuse, open racism, drug use, erratic behaviour and that he is clearly absent from the business from the business 80%+ of the time and the product pipeline has been dead for years.
The man already owned a ton of shares which gave him huge upside on success aka "incentive" and said he wasn't leaving so what were the shareholders paying for? The board had a fiduciary duty to negotiate the best deal and instead they gave him what he asked for - a package many orders of magnitude greater than any CEO compensation ever before. What would the no. 2 CEO pick have cost?
No small issue is that we will likely see how temporary these "achievements" are as Tesla will, someday, be priced like a car company and Tesla's books have had red flags over them for a decade.
Note that board has always been given compensation way out of line with any business ever before and it has been notably spineless through Musk's fraud convictions, impregnation of co-workers, pedo-gate abuse, open racism, drug use, erratic behaviour and that he is clearly absent from the business from the business 80%+ of the time and the product pipeline has been dead for years.
The man already owned a ton of shares which gave him huge upside on success aka "incentive" and said he wasn't leaving so what were the shareholders paying for? The board had a fiduciary duty to negotiate the best deal and instead they gave him what he asked for - a package many orders of magnitude greater than any CEO compensation ever before. What would the no. 2 CEO pick have cost?
No small issue is that we will likely see how temporary these "achievements" are as Tesla will, someday, be priced like a car company and Tesla's books have had red flags over them for a decade.
> The fact that a judge can come in and completely reverse such a decision is mind blowing and seems more like a judicial activism.
A shareholder filed a lawsuit, it went to the courts, a judge ruled on it. What's the issue?
What recourse does a minority investor have if the BoD, which is supposed to represent shareholder interests, is full of CEO loyalists agreeing to cartoonishly large bonuses?
A shareholder filed a lawsuit, it went to the courts, a judge ruled on it. What's the issue?
What recourse does a minority investor have if the BoD, which is supposed to represent shareholder interests, is full of CEO loyalists agreeing to cartoonishly large bonuses?
They did represent the shareholder interest. This compensation deal delivered a crazy increase in company valuation. Tesla went from selling 200k vehicles to selling over 1M.
Given how much control Musk exerted over the process it's less that the board represented shareholder interests and more that the shareholders happened to benefit despite not being represented and not being fully informed on how the compensation package was put together. Perhaps a subtle distinction, but important in the eyes of the law.
> Did it have a material change on the outcome of the vote?
Potentially, yes. Stockholders did complain about the proposed grant even with their incomplete information; who knows what they might have said if the disclosure were more complete. From the opinion:
> The two largest proxy advisors, ISS and Glass Lewis, both recommended voting against the 2018 Grant.
> [Specific details about the objections from ISS/Glass Lewis]
> Stockholders also criticized the Grant, noting that Musk’s Tesla equity provided sufficient motivation for Musk to perform, the Grant’s size and dilutive effects were excessive, the EBITDA milestones were too low, and that linear milestones were inappropriate for an “exponential company” like Tesla.
If the stockholders knew that the directors were not independent and/or that there wasn't a substantial negotiation and/or that (some of?) the planned targets were not that ambitious, then they may reasonably say no to the grant.
> the board went alon[g] with it
The board was not independent. There were nine directors on the board, but one left early, so that leaves 8. Elon is one and his brother another. Antonio Gracias and James Murdoch have close personal ties to Elon, and the former is also very heavily invested in Elon's businesses. Ira Ehrenpreis also has a "weighty" relationship with Elon and is also invested in Elon and Kimball's business ventures other than Tesla, though not to the same extent as Gracias.
The first 3 (Kimball, Gracias, and Murdoch) were determined to lack independence from Musk due to their close personal relatioship - 4 out of 8, and that doesn't include Ehrenpreis' personal ties.
In addition, the judge found that the board didn't act independently either. Some of the members themselves testified that they were working together with Musk during the negotiations - hardly a sign of acting independently of their personal ties.
> and the shareholder approved
That was determined to be irrelevant due to Tesla making material omissions in the proxy statement before the vote.
> The fact that a judge can come in and completely reverse such a decision is mind blowing and seems more like a judicial activism.
That's the law. If you break the rules it's not unreasonable to be prevented from reaping the rewards of doing so.
Potentially, yes. Stockholders did complain about the proposed grant even with their incomplete information; who knows what they might have said if the disclosure were more complete. From the opinion:
> The two largest proxy advisors, ISS and Glass Lewis, both recommended voting against the 2018 Grant.
> [Specific details about the objections from ISS/Glass Lewis]
> Stockholders also criticized the Grant, noting that Musk’s Tesla equity provided sufficient motivation for Musk to perform, the Grant’s size and dilutive effects were excessive, the EBITDA milestones were too low, and that linear milestones were inappropriate for an “exponential company” like Tesla.
If the stockholders knew that the directors were not independent and/or that there wasn't a substantial negotiation and/or that (some of?) the planned targets were not that ambitious, then they may reasonably say no to the grant.
> the board went alon[g] with it
The board was not independent. There were nine directors on the board, but one left early, so that leaves 8. Elon is one and his brother another. Antonio Gracias and James Murdoch have close personal ties to Elon, and the former is also very heavily invested in Elon's businesses. Ira Ehrenpreis also has a "weighty" relationship with Elon and is also invested in Elon and Kimball's business ventures other than Tesla, though not to the same extent as Gracias.
The first 3 (Kimball, Gracias, and Murdoch) were determined to lack independence from Musk due to their close personal relatioship - 4 out of 8, and that doesn't include Ehrenpreis' personal ties.
In addition, the judge found that the board didn't act independently either. Some of the members themselves testified that they were working together with Musk during the negotiations - hardly a sign of acting independently of their personal ties.
> and the shareholder approved
That was determined to be irrelevant due to Tesla making material omissions in the proxy statement before the vote.
> The fact that a judge can come in and completely reverse such a decision is mind blowing and seems more like a judicial activism.
That's the law. If you break the rules it's not unreasonable to be prevented from reaping the rewards of doing so.
The plan targets not that ambitious? $60B to $650B to get the full package in how many years? If the committee was his mom and his brother %79 would have voted yes. One very small shareholder and a judge with bias overrule the majority of shareholder, trying to wrap it into a legal argument.
> The plan targets not that ambitious?
Some of them, at the very least. If you were projecting that you were going to meet some of the milestones before offering the compensation plan and tell your investors that you project that you have a >=70% chance of meeting some of the milestones a few months after offering the grant, then I think it's reasonable to claim that at least some of the milestones were not that ambitious.
Some of the shareholders made similar criticisms, even without knowing about the internal projections.
> One very small shareholder and a judge with bias overrule the majority of shareholder
The shareholder vote was not fully informed, so it counts for little in these types of matters. Shareholder size also doesn't matter - they're all equal under the eyes of the law. Might doesn't make right.
I'm also curious - why do you think the judge is biased?
Some of them, at the very least. If you were projecting that you were going to meet some of the milestones before offering the compensation plan and tell your investors that you project that you have a >=70% chance of meeting some of the milestones a few months after offering the grant, then I think it's reasonable to claim that at least some of the milestones were not that ambitious.
Some of the shareholders made similar criticisms, even without knowing about the internal projections.
> One very small shareholder and a judge with bias overrule the majority of shareholder
The shareholder vote was not fully informed, so it counts for little in these types of matters. Shareholder size also doesn't matter - they're all equal under the eyes of the law. Might doesn't make right.
I'm also curious - why do you think the judge is biased?
It doesn't matter. You can't get your compensation package set by your friends in a public company and then say it was okay just because the company did well. Agents are supposed to represent the shareholders' interests.
They did. Board approved, shareholders approved, the company hit the milestones.
> Board approved, shareholders approved
All covered in the judgement. Shareholders can't act in their best interests if they don't know that the advice they're getting is a product of conflict of interests instead of a genuine independent recommendation.
> the company hit the milestones.
Irrelevant since we don't know if the company would have hit those milestones regardless. The ruling covers this, in her judgement Elon had sufficient motivation with existing equity that the pay package was unnecessary from the interests of shareholders.
All covered in the judgement. Shareholders can't act in their best interests if they don't know that the advice they're getting is a product of conflict of interests instead of a genuine independent recommendation.
> the company hit the milestones.
Irrelevant since we don't know if the company would have hit those milestones regardless. The ruling covers this, in her judgement Elon had sufficient motivation with existing equity that the pay package was unnecessary from the interests of shareholders.
Musk lied to the shareholders to secure those votes. It doesn’t matter what they voted when fraud is involved. That’s why a judge gets to decide.
Enforcing the law is not “judicial activism”
Enforcing the law is not “judicial activism”
Buss was the CFO of SolarCity, which Tesla acquired, and Ehrenpreis was friends with Musk at Stanford. As an employee, Buss is by definition not an independent director, see NASDAQ SMR 5605(2)(B).
Oh, excellent catch - agreed, Gracias, Buss, and probably Ehrenpreis and perhaps Denholm are, at best, questionably independent (and for a couple of them quite clearly not independent).
Also agreed that this is the crux of the reasons why the pay package was so problematic.
Also agreed that this is the crux of the reasons why the pay package was so problematic.
Remember when you said Meta wasn’t a good buy?
“ Why is that an incredible investment opportunity? Something like ~53% of the voting power is owned or controlled by Zuck, and there’s no indication that he has any plans to meaningfully return money to shareholders,* rather than continuing to write ten-digit company checks every month to fund the metaverse. If you want to buy META as a bet on Zuck himself or the success of their conception of the metaverse, that’s one thing, but I don’t see how this is a reasonable value investment based on their current management and capital structure. * I know Meta has done stock buy-backs from time to time, which are of course economically equivalent to a dividend (except more tax efficient), but from eyeballing their history of repurchases, it looks like they, like many issuers, managed to set billions of dollars of shareholder money on fire by repurchasing the stock while it was trading at rich multiples.”
“ Why is that an incredible investment opportunity? Something like ~53% of the voting power is owned or controlled by Zuck, and there’s no indication that he has any plans to meaningfully return money to shareholders,* rather than continuing to write ten-digit company checks every month to fund the metaverse. If you want to buy META as a bet on Zuck himself or the success of their conception of the metaverse, that’s one thing, but I don’t see how this is a reasonable value investment based on their current management and capital structure. * I know Meta has done stock buy-backs from time to time, which are of course economically equivalent to a dividend (except more tax efficient), but from eyeballing their history of repurchases, it looks like they, like many issuers, managed to set billions of dollars of shareholder money on fire by repurchasing the stock while it was trading at rich multiples.”
Court's opinion/judgement [1], and a PDF version [2]
[1] https://www.courtlistener.com/opinion/9470356/richard-j-torn...
[2] https://courts.delaware.gov/Opinions/Download.aspx?id=359340
[1] https://www.courtlistener.com/opinion/9470356/richard-j-torn...
[2] https://courts.delaware.gov/Opinions/Download.aspx?id=359340
The arguments used here are weird. The decision says that Musk was close friends with many members of the board so he effectively controlled it. That's the case for many, if not most public companies.
The other argument was that the board didn't meaningfully push back on the proposed remuneration scheme. Yet, it amounted to a huge gamble - multiplying the value of a 50B company by over 10x -, which in case of success the board agreed to reward with 6% of shares. It sounds silly to me to suggest the board failed their duty when shareholders - including them - had record profits even discounting Musk's reward.
The other argument was that the board didn't meaningfully push back on the proposed remuneration scheme. Yet, it amounted to a huge gamble - multiplying the value of a 50B company by over 10x -, which in case of success the board agreed to reward with 6% of shares. It sounds silly to me to suggest the board failed their duty when shareholders - including them - had record profits even discounting Musk's reward.
Having friends in the board is fine. Using it for excessive compensation is not. The court argued that Elon effectively has a full control on the board and they failed to prove whether the package is fair, hence Elon effectively set the package himself. I don't know the technical details on the "fairness" so won't talk about this though.
And because Elon isn’t going to be granted his bonus shares, even more of that will go to others shareholders instead of to Musk. And that’s the point. Let 10 be “no value to other shareholders, all value to Musk” and 0 be “all value to other shareholders, no value to Musk.” That Elon’s proposal amounted to 2.5 instead of 2.1 isn’t the point, it’s that the Board never even tried to negotiate for a number other than 2.5.
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> The decision says that Musk was close friends with many members of the board so he effectively controlled it. That's the case for many, if not most public companies.
In Eastern Europe we were calling this tunneling of a company - create a tunnel with help from inside to get riches out and leave the shell to its own demise.
In Eastern Europe we were calling this tunneling of a company - create a tunnel with help from inside to get riches out and leave the shell to its own demise.
> In Eastern Europe we were calling this tunneling of a company - create a tunnel with help from inside to get riches out and leave the shell to its own demise.
Elon prefers to call it “boring.”
Elon prefers to call it “boring.”
Increasing the share price by 10x and turning the Model 3 into the worlds best selling vehicle is hardly "leaving the shell to its own demise"
*edit: Model Y
*edit: Model Y
I think we should wait 1-3 years to judge.
If Tesla doesn't live up to the hype it created - and I believe there is virtually 0% chance it does - and the stock inevitably crashes - say 90% from here, will your judgement be the same ?
If Tesla doesn't live up to the hype it created - and I believe there is virtually 0% chance it does - and the stock inevitably crashes - say 90% from here, will your judgement be the same ?
Yes, he delivered a 10x return to those shareholders that approved. If they choose to stay invested now and lose money, that’s all on them. They know everything you do, including your expert “0%” analysis.
Well, increasing the share price 10x is not a good benchmark - it should be (and we all know it's not in this case) independent of the CEO - it should be dependent on the economic performance of the company. A CEO with such a huge package as discussed here, may be more inclined to, let's just say be 'overly optimistic'. One such overly optimistic CEO in the same industry recently went to jail.
But anyway, the trail is not really about that - it's about proper governance. If you're a public company you get to benefit from a lot of things, but you do have some obligations. And those were pretty clearly broken - keep in mind that this complaint was filled in 2018 - just after the package was awarded.
Just to be clear - I do think that what Elon Musk did, lifting Tesla from a startup to a top10 carmaker, is absolutely remarkable But this judgment has nothing to do with it.
But anyway, the trail is not really about that - it's about proper governance. If you're a public company you get to benefit from a lot of things, but you do have some obligations. And those were pretty clearly broken - keep in mind that this complaint was filled in 2018 - just after the package was awarded.
Just to be clear - I do think that what Elon Musk did, lifting Tesla from a startup to a top10 carmaker, is absolutely remarkable But this judgment has nothing to do with it.
The Model 3 is not even close to the “best selling vehicle of all time” by any metric.
https://thedriven.io/2023/05/26/tesla-model-y-overtakes-coro...
I guess it was the Model Y!
I guess it was the Model Y!
Best selling car over a cherry picked time span is quite far from "best selling car of all time".
He must not be very good at it because he left most of the value behind
There are now happy Tesla owners everywhere, and it’s perfectly placed to benefit from the AI wave he knew was coming, enough to found OpenAI
There are now happy Tesla owners everywhere, and it’s perfectly placed to benefit from the AI wave he knew was coming, enough to found OpenAI
In the west they call it a "leveraged buyout".
"That's the case for many, if not most public companies."
But even if true what effect does that have on her arguments. She never claims having these relationships is unusual. She only states that the minority shareholders were not informed about them.
"Yet, it amounted to a huge gamble - multiplying the value of a 50B company by over 10x -, which in case of success the board agreed to reward with 6% of shares."
Her opinion emphasises that Musk indicated, repeatedly, he had no intention of ever leaving Tesla. What was the gamble. No matter what happens he still stays working there forever. Where is the leverage. Musk was even dumb enough to admit he was "negotiating against himself".
Try going to your boss, promising you will never, ever leave and then ask them for a raise.^1 Imagine the boss has no personal relationship with you and acts in the best interests of the company.
1. Just in case anyone becomes confused: I am not suggesting what Musk was "negotiating" was a "raise", I am simply using as a hypothetical a more common scenario amongst mere mortals where compensation is being negotiated and the threat of leaving can be used as leverage.
But even if true what effect does that have on her arguments. She never claims having these relationships is unusual. She only states that the minority shareholders were not informed about them.
"Yet, it amounted to a huge gamble - multiplying the value of a 50B company by over 10x -, which in case of success the board agreed to reward with 6% of shares."
Her opinion emphasises that Musk indicated, repeatedly, he had no intention of ever leaving Tesla. What was the gamble. No matter what happens he still stays working there forever. Where is the leverage. Musk was even dumb enough to admit he was "negotiating against himself".
Try going to your boss, promising you will never, ever leave and then ask them for a raise.^1 Imagine the boss has no personal relationship with you and acts in the best interests of the company.
1. Just in case anyone becomes confused: I am not suggesting what Musk was "negotiating" was a "raise", I am simply using as a hypothetical a more common scenario amongst mere mortals where compensation is being negotiated and the threat of leaving can be used as leverage.
> Try going to your boss, promising you will never, ever leave and then ask them for a raise.
That was not a raise, it was a contingent payout. One could argue that kept him focused. Once done, he could scatter his attention to things like hostile takeovers and the meaning of free speech.
That was not a raise, it was a contingent payout. One could argue that kept him focused. Once done, he could scatter his attention to things like hostile takeovers and the meaning of free speech.
> At a high level, the “6% for $600 billion” argument has a lot of appeal. But
that appeal quickly fades when one remembers that Musk owned 21.9% of Tesla when
the board approved his compensation plan. This ownership stake gave him every
incentive to push Tesla to levels of transformative growth—Musk stood to gain over $10 billion for every $50 billion in market capitalization increase. Musk had no intention of leaving Tesla, and he made that clear at the outset of the process and throughout this litigation.
One could argue, as judge argued in the above excerpt, that his 21.9% ownership (before this compensation) of Tesla is what could keep him focused...
One could argue, as judge argued in the above excerpt, that his 21.9% ownership (before this compensation) of Tesla is what could keep him focused...
One could argue, but it would not be true, because in the real life it obviously didn’t keep him focused (see X, formerly known as Twitter).
In the real life, his twitter antics happened while he believed the compensation scheme would be fulfilled. So real life kind of proves that the compensation scheme didn't provide the sort of focus spoken of here.
E: Hey Boss, I want you to know that I am committed to staying with this company for life, no matter what happens.
B: OK.
E: I would like some incentives, including more money and increased control over the direction of the company if I hit certain milestones.
B: And what if we say no?
E: Um, I guess I'll just keep on working toward the milestones.
Did Musk get suckered into working with more focus than he would have absent the compensation package. As long as he believed he would get it, it worked to keep him focused. Yeah, right. By his own statements he would have kept on working with focus even if he was not promised the compensation package. Either way, there is no need to give it to him. He is not going anywhere.
B: OK.
E: I would like some incentives, including more money and increased control over the direction of the company if I hit certain milestones.
B: And what if we say no?
E: Um, I guess I'll just keep on working toward the milestones.
Did Musk get suckered into working with more focus than he would have absent the compensation package. As long as he believed he would get it, it worked to keep him focused. Yeah, right. By his own statements he would have kept on working with focus even if he was not promised the compensation package. Either way, there is no need to give it to him. He is not going anywhere.
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Fun fact - it's the same judge that forced Musk to buy Twitter !
I’m not arguing the judgment was unfair and I’m not asserting that musk and the board acted wisely, prudently or even ethically.
But the guy just got robbed of his compensation after increasing the value of the company’s stock by 10x. In return for accomplishing this he was supposed to get 6% equity.
That does not sound to me like the plaintiffs suffered actual losses.
But the guy just got robbed of his compensation after increasing the value of the company’s stock by 10x. In return for accomplishing this he was supposed to get 6% equity.
That does not sound to me like the plaintiffs suffered actual losses.
The judge said his compensation was that he owned 21% of Tesla so that he already received $10B for every $50B he increased Tesla’s value.
Awarding more stock to Musk was just depriving the other stock holders of their value.
Awarding more stock to Musk was just depriving the other stock holders of their value.
That doesn't seem like the judge was acting in the fiduciary interest of Tesal. It seems like the judge was acting in the interest of stopping corporate greed.
The judge had multiple quotes to that effect, including "Is the richest man on Earth overpaid?" - that's not a question you ask for matters of fiduciary responsibility, because it completely ignores the question of how valuable Musk is to Tesla.
The judge had multiple quotes to that effect, including "Is the richest man on Earth overpaid?" - that's not a question you ask for matters of fiduciary responsibility, because it completely ignores the question of how valuable Musk is to Tesla.
The judge makes clear that he thinks that Musk was likely to stay CEO of Tesla whether or not this pay package occurred. It was already in Musk’s interest to stay given his shareholdings.
Remember that this growth of Tesla brought Musk $120B of wealth given his existing shareholdings. That is already a lot of compensation for a job well done.
Remember that this growth of Tesla brought Musk $120B of wealth given his existing shareholdings. That is already a lot of compensation for a job well done.
Which is an interesting argument. If the board should reject any deals, even mutually beneficial ones, because they already have someone in golden handcuffs, then Mutual assured destruction is the only leverage remaining.
Your comment got downvoted (probably because MAD as the only remaining option is strong hyperbole) but the core thrust is sensible.
Knowing that a CEO is not going to leave isn't the only relevant factor in discussing increasing CEO comp. Any decent manager understands this about their employees. You may be 100% confident that they won't quit if you don't give them a bonus and also be 100% confident that giving them a bonus (due to moral, motivation, evangelism, etc) is the best outcome for the company anyway.
Musk had other companies that were splitting his focus. Sure, without that 6% he'd still be CEO of Tesla. But would he have put more energy instead into SpaceX? Boring Company? Nerualink? OpenAI?
When your CEO has so many places to focus his attention, giving him more equity to remain the preferred child makes a lot of sense as a mutually beneficial agreement.
*Especially* when that increased compensation is directly tied to performance. And not a trivial outcome, but a serious outcome that brings hundreds of billions of dollars to shareholders.
Knowing that a CEO is not going to leave isn't the only relevant factor in discussing increasing CEO comp. Any decent manager understands this about their employees. You may be 100% confident that they won't quit if you don't give them a bonus and also be 100% confident that giving them a bonus (due to moral, motivation, evangelism, etc) is the best outcome for the company anyway.
Musk had other companies that were splitting his focus. Sure, without that 6% he'd still be CEO of Tesla. But would he have put more energy instead into SpaceX? Boring Company? Nerualink? OpenAI?
When your CEO has so many places to focus his attention, giving him more equity to remain the preferred child makes a lot of sense as a mutually beneficial agreement.
*Especially* when that increased compensation is directly tied to performance. And not a trivial outcome, but a serious outcome that brings hundreds of billions of dollars to shareholders.
If I had to guess, I would say the comment was downvoted because it is unnecessary adversarial, and ignores the obvious non-oppositional-defiant-disorder option: elmu saying "you're right, I don't need that additional compensation to motivate me, my existing stock ownership will motivate me", and for him then to perform.
If there's a risk that he wouldn't do the job because of an inability to focus given other responsibilities, a fiduciary would be obliged to remove him from his position. Money wouldn't gain his "focus", because then he would just get his friends at spacex to give him even more tens of billions of company money to "focus" even more. And we all know he'd just be shitposting on Twitter the whole time no matter what.
If there's a risk that he wouldn't do the job because of an inability to focus given other responsibilities, a fiduciary would be obliged to remove him from his position. Money wouldn't gain his "focus", because then he would just get his friends at spacex to give him even more tens of billions of company money to "focus" even more. And we all know he'd just be shitposting on Twitter the whole time no matter what.
>If I had to guess, I would say the comment was downvoted because it is unnecessary adversarial, and ignores the obvious non-oppositional-defiant-disorder option: elmu saying "you're right, I don't need that additional compensation to motivate me, my existing stock ownership will motivate me", and for him then to perform.
I think there are obviously many options, but I highlighted that aspect because i think it is the most interesting the most interesting. It isnt contradicted by anything you said. Essentially, the question is how do you negotiate splitting the rewards of an continued ongoing venture, when both parties already benefit from success.
You see this often in situations of co-ownership. Sometimes one start-up founder will stop working, knowing the other has incentive to make it work. Sometimes you see it in schools when there are group projects.
I think there are obviously many options, but I highlighted that aspect because i think it is the most interesting the most interesting. It isnt contradicted by anything you said. Essentially, the question is how do you negotiate splitting the rewards of an continued ongoing venture, when both parties already benefit from success.
You see this often in situations of co-ownership. Sometimes one start-up founder will stop working, knowing the other has incentive to make it work. Sometimes you see it in schools when there are group projects.
> Essentially, the question is how do you negotiate splitting the rewards of an continued ongoing venture, when both parties already benefit from success.
Close: it's not "both" parties, it's all shareholders, so way more than 2 people to pay. And the "how" is already decided: shareholder vote. And the rewards are already split amongst the shareholders, of which elmu is a large one.
Theoretically, elmu might be able to get even more compensation than that, via shareholder vote. But the court said elmu can't lie to all the shareholders to get them to vote yes (which he was found guilty of having done, thus voiding the previous shareholder vote).
For further discussion, I'd like to focus on the substantive points of the judgement. Some may have personal opinions on the matter, and the judge considered all those personal opinions, judged them, and came to the below conclusions:
- elmu's stock ownership is enough to motivate him, even without a 50 billion dollar additional stock/option grant;
- elmu improperly interfered in Tesla governance to exert undue influence on his own compensation at the expense of shareholders and the company;
- elmu defrauded shareholders to personally enrich himself at the expense of them and the company.
Are these arguable? Well, they were before the judgement, and were indeed argued about. Now that the case is over and the judgement rendered, they aren't. So, I'd like to hear your thoughts on these points now that they've officially and formally been confirmed true.
Close: it's not "both" parties, it's all shareholders, so way more than 2 people to pay. And the "how" is already decided: shareholder vote. And the rewards are already split amongst the shareholders, of which elmu is a large one.
Theoretically, elmu might be able to get even more compensation than that, via shareholder vote. But the court said elmu can't lie to all the shareholders to get them to vote yes (which he was found guilty of having done, thus voiding the previous shareholder vote).
For further discussion, I'd like to focus on the substantive points of the judgement. Some may have personal opinions on the matter, and the judge considered all those personal opinions, judged them, and came to the below conclusions:
- elmu's stock ownership is enough to motivate him, even without a 50 billion dollar additional stock/option grant;
- elmu improperly interfered in Tesla governance to exert undue influence on his own compensation at the expense of shareholders and the company;
- elmu defrauded shareholders to personally enrich himself at the expense of them and the company.
Are these arguable? Well, they were before the judgement, and were indeed argued about. Now that the case is over and the judgement rendered, they aren't. So, I'd like to hear your thoughts on these points now that they've officially and formally been confirmed true.
>And the "how" is already decided: shareholder vote. And the rewards are already split amongst the shareholders, of which elmu is a large one.
Thats not how you negotiate, apply leverage, and determine a middle-ground. That's how you approve a negotiated deal.
>For further discussion, I'd like to focus on the substantive points of the judgement. Some may have personal opinions on the matter, and the judge considered all those personal opinions, judged them, and came to the below conclusions:
To be clear, I have zero interest in discussing the judges finding in the rest of the musk case (e.g. improper disclosure and lack if independence). That seems pretty straight forward to me. What I do find interesting, as stated multiple times above, is the comp negotiations & motivation aspect.
>elmu's stock ownership is enough to motivate him, even without a 50 billion dollar additional stock/option grant
This may be true, but don't think it is fully fleshed out logic. Elon would get his pre-deal portion of profit, with or without ongoing participation. It also ignores the damage Elon could do by leaving, which the company is also paying to avoid. It assumes that if Musk was denied comp, he would fall back to what you called a "non-oppositional-defiant-disorder option". The way I read the judgement, Musk would have a better case if he had been overtly oppositional, threatening, and held the board hostage, saying "pay me more or I will leave and we both suffer".
It seems to bake in the idea that Beyond a certain point, money either has no marginal utility to Musk, or that musk has no more capacity to contribute. The first is wrong because otherwise musk wouldn't be pursuing a deal. The second seems to ignore the difference between vested and conditional equity. The judge partially addresses the second part by bringing up statements where Elon said he had no intention of leaving. However, it seems obvious that there was a presumption that there would be some sort of additional compensation.
This case is one example, but I also want to know how this situation is handled in other instances, as it isn't that rare. There are probably econ papers on the topic. e.g. if you know your partner is really invested in your team school project, what stops you from checking out. Based on what I have seen in other companies, Boards often DO give officers that are already major shareholders more incentives, and dont just have them work to increase valuation of their pre-existing equity.
Thats not how you negotiate, apply leverage, and determine a middle-ground. That's how you approve a negotiated deal.
>For further discussion, I'd like to focus on the substantive points of the judgement. Some may have personal opinions on the matter, and the judge considered all those personal opinions, judged them, and came to the below conclusions:
To be clear, I have zero interest in discussing the judges finding in the rest of the musk case (e.g. improper disclosure and lack if independence). That seems pretty straight forward to me. What I do find interesting, as stated multiple times above, is the comp negotiations & motivation aspect.
>elmu's stock ownership is enough to motivate him, even without a 50 billion dollar additional stock/option grant
This may be true, but don't think it is fully fleshed out logic. Elon would get his pre-deal portion of profit, with or without ongoing participation. It also ignores the damage Elon could do by leaving, which the company is also paying to avoid. It assumes that if Musk was denied comp, he would fall back to what you called a "non-oppositional-defiant-disorder option". The way I read the judgement, Musk would have a better case if he had been overtly oppositional, threatening, and held the board hostage, saying "pay me more or I will leave and we both suffer".
It seems to bake in the idea that Beyond a certain point, money either has no marginal utility to Musk, or that musk has no more capacity to contribute. The first is wrong because otherwise musk wouldn't be pursuing a deal. The second seems to ignore the difference between vested and conditional equity. The judge partially addresses the second part by bringing up statements where Elon said he had no intention of leaving. However, it seems obvious that there was a presumption that there would be some sort of additional compensation.
This case is one example, but I also want to know how this situation is handled in other instances, as it isn't that rare. There are probably econ papers on the topic. e.g. if you know your partner is really invested in your team school project, what stops you from checking out. Based on what I have seen in other companies, Boards often DO give officers that are already major shareholders more incentives, and dont just have them work to increase valuation of their pre-existing equity.
> Thats not how you negotiate, apply leverage, and determine a middle-ground.
Neither is populating the compensation board with people rife with conflicts of interest (nor is lying about it to shareholders). That was one of the key findings here: the board, as a result of musk's actions, failed to properly negotiate in the best interest of shareholders.
> This may be true, but don't think it is fully fleshed out logic. Elon would get his pre-deal portion of profit, with or without ongoing participation.
It was found by the judge to be fully fleshed out logic. elmu would get no compensation without participation, because his wealth would decrease as a result of lack of participation, and increase as a result of his participation. That was judged to be enough motivation for him to participate.
> It also ignores the damage Elon could do by leaving, which the company is also paying to avoid.
It doesn't ignore that: it was directly addressed. As judged, that threat is empty, he was always going to stay anyways. Plus, he would lose billions in wealth via stock price decline if he bailed. Doubt it? The package was voided, and he's staying. Indeed, you pointed this out yourself:
> The judge partially addresses the second part by bringing up statements where Elon said he had no intention of leaving. However, it seems obvious that there was a presumption that there would be some sort of additional compensation
In the judge's judgement, there was no such presumption, and saying a presumption one makes up is "obvious" doesn't help the case for it being so. In any case, he was already going to achieve additional compensation via stock appreciation.
To be absolutely clear: if you own a company, and you increase the value of the company, even if you take no paycheck, you have been compensated. The appreciation in value of your stocks is compensation. If the value increases ten billion in 1 year, you have been compensated ten billion that year for your efforts.
Now, billions is a lot of compensation for 1 year, but if elmu wants more compensation than that, he has to honestly put together a compensation board that represents shareholders, honestly negotiate against it, honestly disclose all relevant info, and honestly hold a shareholder vote. He failed at all these, so now he has to start over (if he wants).
>if you know your partner is really invested in your team school project, what stops you from checking out.
The analogy here is, 'if you know musk is really invested in _his_personal_ school project, what stops _him_ from checking out?' Obviously the fact that he's really (and literally) [in]vested in his own personal project!
Neither is populating the compensation board with people rife with conflicts of interest (nor is lying about it to shareholders). That was one of the key findings here: the board, as a result of musk's actions, failed to properly negotiate in the best interest of shareholders.
> This may be true, but don't think it is fully fleshed out logic. Elon would get his pre-deal portion of profit, with or without ongoing participation.
It was found by the judge to be fully fleshed out logic. elmu would get no compensation without participation, because his wealth would decrease as a result of lack of participation, and increase as a result of his participation. That was judged to be enough motivation for him to participate.
> It also ignores the damage Elon could do by leaving, which the company is also paying to avoid.
It doesn't ignore that: it was directly addressed. As judged, that threat is empty, he was always going to stay anyways. Plus, he would lose billions in wealth via stock price decline if he bailed. Doubt it? The package was voided, and he's staying. Indeed, you pointed this out yourself:
> The judge partially addresses the second part by bringing up statements where Elon said he had no intention of leaving. However, it seems obvious that there was a presumption that there would be some sort of additional compensation
In the judge's judgement, there was no such presumption, and saying a presumption one makes up is "obvious" doesn't help the case for it being so. In any case, he was already going to achieve additional compensation via stock appreciation.
To be absolutely clear: if you own a company, and you increase the value of the company, even if you take no paycheck, you have been compensated. The appreciation in value of your stocks is compensation. If the value increases ten billion in 1 year, you have been compensated ten billion that year for your efforts.
Now, billions is a lot of compensation for 1 year, but if elmu wants more compensation than that, he has to honestly put together a compensation board that represents shareholders, honestly negotiate against it, honestly disclose all relevant info, and honestly hold a shareholder vote. He failed at all these, so now he has to start over (if he wants).
>if you know your partner is really invested in your team school project, what stops you from checking out.
The analogy here is, 'if you know musk is really invested in _his_personal_ school project, what stops _him_ from checking out?' Obviously the fact that he's really (and literally) [in]vested in his own personal project!
It seems like you cant separate the negotiation aspect from this specific case and the ruling of this specific judge. I have said to put this aside and focus on the other question multiple times. Now you negate everything you argued with this statement making your position contingent on the other facts of the case:
>Now, billions is a lot of compensation for 1 year, but if elmu wants more compensation than that, he has to honestly put together a compensation board that represents shareholders, honestly negotiate against it, honestly disclose all relevant info, and hold a shareholder vote. He failed at all these, so now he has to start over (if he wants).
I dont think you are honestly trying to engage in a conversation about negotiation, and want to make a specific point about Musk that I'm not interested in. If you want to continue, you can respond with relevant points about negotiation. If not, that fine too, I just wish you hadn't wasted my time.
>Now, billions is a lot of compensation for 1 year, but if elmu wants more compensation than that, he has to honestly put together a compensation board that represents shareholders, honestly negotiate against it, honestly disclose all relevant info, and hold a shareholder vote. He failed at all these, so now he has to start over (if he wants).
I dont think you are honestly trying to engage in a conversation about negotiation, and want to make a specific point about Musk that I'm not interested in. If you want to continue, you can respond with relevant points about negotiation. If not, that fine too, I just wish you hadn't wasted my time.
> When your CEO has so many places to focus his attention, giving him more equity to remain the preferred child makes a lot of sense as a mutually beneficial agreement.
Alternatively, you could simply condition the compensation on spending a certain amount of time/attention on Tesla. That seems like a much more straightforwards solution of keeping Musk's attention were actually a concern. Perhaps that would warrant a further bump in compensation, but in exchange you get certainty.
Alternatively, you could simply condition the compensation on spending a certain amount of time/attention on Tesla. That seems like a much more straightforwards solution of keeping Musk's attention were actually a concern. Perhaps that would warrant a further bump in compensation, but in exchange you get certainty.
Basing CEO compensation on time spent instead of performance is a horrible idea, IMO.
Basing CEO compensation only on time spent may seem like a bad idea, sure, but there's nothing that prevents you from stipulating both performance and time/attention metrics. You may have to offer more equity, but that's all part and parcel of negotiations.
if you want someone's attention so that they catch you fish, it is better to pay based on fish, not time.
The two aren't mutually exclusive, and the question here is return on investment, especially if you know said fisherman has strong interests in other ventures. If you're already paying someone to catch you fish, are you going to get more fish by paying them even more or by paying them more and asking them to devote time/attention to catching fish as well?
>are you going to get more fish by paying them even more or by paying them more and asking them to devote time/attention to catching fish as well?
I think that is a really good question. If someone is paid $1 million per fish, can you expect more paying extra for time OR fish. Why give them anything at all?
That's what I thought was really interesting in the parent post. Does the fisherman have leverage? Are their only options to keep the old deal, or stop catching fish out of spite?
I think that is a really good question. If someone is paid $1 million per fish, can you expect more paying extra for time OR fish. Why give them anything at all?
That's what I thought was really interesting in the parent post. Does the fisherman have leverage? Are their only options to keep the old deal, or stop catching fish out of spite?
> If someone is paid $1 million per fish, can you expect more paying extra for time OR fish. Why give them anything at all?
It comes down to what the payor wants and what they think would provide the best return on their money. If the fisherman's performanace is good enough, perhaps the existing compensation plan is good enough. If you want more, then it becomes a more interesting question, and I don't think there would be a single right answer.
> Does the fisherman have leverage? Are their only options to keep the old deal, or stop catching fish out of spite?
Of course the fisherman has leverage. It isn't an all-or-nothing situation, either - they can offer a greater return for a greater price, offer to keep the existing arrangement, threaten to reduce time/attention, threaten to walk away altogether, or some other offer. And the other party would be free to make their own counteroffers to try to get the result they want.
It comes down to what the payor wants and what they think would provide the best return on their money. If the fisherman's performanace is good enough, perhaps the existing compensation plan is good enough. If you want more, then it becomes a more interesting question, and I don't think there would be a single right answer.
> Does the fisherman have leverage? Are their only options to keep the old deal, or stop catching fish out of spite?
Of course the fisherman has leverage. It isn't an all-or-nothing situation, either - they can offer a greater return for a greater price, offer to keep the existing arrangement, threaten to reduce time/attention, threaten to walk away altogether, or some other offer. And the other party would be free to make their own counteroffers to try to get the result they want.
The board had a fiduciary interest and did what was best for Elon. They had no rational other than “I love the guy” and “it’s what he wanted.”
The judges only interest is having to act in the best interest in shareholders in the absence of the board performing their duty.
The judges only interest is having to act in the best interest in shareholders in the absence of the board performing their duty.
"I love the guy" is an understatement...
> The working group included management members who were beholden to Musk, such as General Counsel Todd Maron who was Musk’s former divorce attorney and whose admiration for Musk moved him to tears during his deposition. [1]
[1] https://courts.delaware.gov/Opinions/Download.aspx?id=359340
> The working group included management members who were beholden to Musk, such as General Counsel Todd Maron who was Musk’s former divorce attorney and whose admiration for Musk moved him to tears during his deposition. [1]
[1] https://courts.delaware.gov/Opinions/Download.aspx?id=359340
The last 4 companies I worked for bought back stock all the time…
> The last 4 companies I worked for bought back stock all the time…
That effects all shareholders equally - the remaining shares are worth a little more. Awarding more stock reduces the percentage of the company each of the remaining shares is worth.
That effects all shareholders equally - the remaining shares are worth a little more. Awarding more stock reduces the percentage of the company each of the remaining shares is worth.
Definitely not the case. Shareholders got back what was theirs of right.
Dozens of CEOs, including CEOs of much larger companies like Satya Nadella and Tim Cook, got $2.2B in stock options that ended up being worth $55B. But I want to stress that no one, ever, got a salary of $2.2B. Satya Nadella just now have crossed the $1B compensation mark.
The market is full of CEOs that 10x-ed their companies' share prices and all they get is a decent salary.
Dozens of CEOs, including CEOs of much larger companies like Satya Nadella and Tim Cook, got $2.2B in stock options that ended up being worth $55B. But I want to stress that no one, ever, got a salary of $2.2B. Satya Nadella just now have crossed the $1B compensation mark.
The market is full of CEOs that 10x-ed their companies' share prices and all they get is a decent salary.
Which other CEOs of companies as large as Tesla have 10x-ed their company’s share price in just five years?
Perhaps share price is not a good metric? And it would actually explain a lot of Musk's behavior in manipulating the stock price.
Given that the discussion is about whether or not the shareholder’s interests were violated, share price is a pretty good metric in this case.
Shareholder interests go beyond pump and dumping a stock.
Share price wasn't the metric used to determine the compensation though. It was revenue growth.
Nvidia is more than twice the size of Tesla currently and 17xed over the last 5 years.
Looking at form 4s, Jensen got about 25 Billion dollar worth of shares between 2018 and 2023.
"Robbed" is an extremely charitable interpretation of anything here.
The document explains this in the first couple paragraphs…
Genuinely curious. Did it mean that Musk wanted the money to be taken from shareholders and be given him instead? That cannot be legal right? Even for the most capitalistic systems. Or am I getting it wrong?
You’re getting it wrong. Him getting the options was contingent on making the shareholders a lot more money. The stock options were contingent upon dramatically increasing the value of the shares (despite the total number of shares increasing). There was no scenario in which the shareholders could lose money from the comp package. Even in the case where the company didn’t grow, they wouldn’t since he’d have gotten no compensation at all.
> There was no scenario in which the shareholders could lose money from the comp package. Even in the case where the company didn’t grow
If I understand other comments correctly then one problem was that the growth was predicted before Musk and friends wrote up the comp package. So money that was supposed to go to the shareholders was redirected into Musks pockets.
If I understand other comments correctly then one problem was that the growth was predicted before Musk and friends wrote up the comp package. So money that was supposed to go to the shareholders was redirected into Musks pockets.
>If I understand other comments correctly then one problem was that the growth was predicted before Musk and friends wrote up the comp package.
not at all. the growth was not predicted, and most thought the deal was crazy (CEOs make deals that are never achieved all the time).
One argument was that the deal wasnt fair because Elon wouldnt work harder for an extra 50 billion, because he already stood to make 100 billion if he hit the milestones.
Like any company, any money that isn't spent on compensation belongs to the shareholders.
not at all. the growth was not predicted, and most thought the deal was crazy (CEOs make deals that are never achieved all the time).
One argument was that the deal wasnt fair because Elon wouldnt work harder for an extra 50 billion, because he already stood to make 100 billion if he hit the milestones.
Like any company, any money that isn't spent on compensation belongs to the shareholders.
The growth was absolutely predicted as to the first tranches, to quote the ruling
> Tesla determined that three operational milestones were “considered probable of achievement,” which meant that they were greater than 70% probable of achievement within approximately one year of the Grant date
> [...]
> Defendants failed to prove the factual predicate for their argument that all the milestones were “ambitious” and difficult to achieve.
> Tesla determined that three operational milestones were “considered probable of achievement,” which meant that they were greater than 70% probable of achievement within approximately one year of the Grant date
> [...]
> Defendants failed to prove the factual predicate for their argument that all the milestones were “ambitious” and difficult to achieve.
that's a fair clarification. I was trying to address the idea that all of the milestones were predicted, which I have seen a few times in the thread.
Fine for non-majority shareholders to be able to sue. Also fine that they win. But 6 years after the package was awarded?
He sued the same year as the pay package, it just took 6 years for the case to complete. From the judgement:
> Plaintiff Richard Tornetta (“Plaintiff”), a Tesla stockholder, filed his complaint on June 5, 2018.
> Plaintiff Richard Tornetta (“Plaintiff”), a Tesla stockholder, filed his complaint on June 5, 2018.
Does this mean he could face margin calls on loans banks have made against his Tesla stock? A substantial part of the collateral may not belong to him after all…?
Yes and no.
He still owns ~400M shares and had options on 304M more. The 304M just got cancelled.
He has around 260M shares pledged as collateral against his loans - at least according to the latest known numbers (from 2022 I believe).
So let's say he's not yet under water, but the margin just got dangerously close to the limit.
He still owns ~400M shares and had options on 304M more. The 304M just got cancelled.
He has around 260M shares pledged as collateral against his loans - at least according to the latest known numbers (from 2022 I believe).
So let's say he's not yet under water, but the margin just got dangerously close to the limit.
According to the Tesla bylaws, you can only leverage 25% of your stock, so that's going to be a problem for him too
https://www.sec.gov/Archives/edgar/data/1318605/000156459021...
> In order to mitigate the risk of forced sales of pledged shares, the Board has a policy that limits pledging of Tesla stock by our directors and executive officers. Pursuant to this policy, directors and executive officers may pledge their stock (exclusive of options, warrants, restricted stock units or other rights to purchase stock) as collateral for loans and investments, provided that the maximum aggregate loan or investment amount collateralized by such pledged stock does not exceed twenty-five percent (25%) of the total value of the pledged stock.
https://www.sec.gov/Archives/edgar/data/1318605/000156459021...
> In order to mitigate the risk of forced sales of pledged shares, the Board has a policy that limits pledging of Tesla stock by our directors and executive officers. Pursuant to this policy, directors and executive officers may pledge their stock (exclusive of options, warrants, restricted stock units or other rights to purchase stock) as collateral for loans and investments, provided that the maximum aggregate loan or investment amount collateralized by such pledged stock does not exceed twenty-five percent (25%) of the total value of the pledged stock.
Not a problem when you can ask your friends to rewrite the rules.
My favorite story:
FedEx doesn't allow BoD/executives to pledge stock for margin loans. But they will make exceptions on a case-by-case basis. They only made on exception, (then) CEO Fred Smith.
How it started:
"In accordance with our policy, Mr. Smith has established his financial capacity to repay the loan without resorting to the pledged shares. In the unlikely event such a sale were necessary, based on the 30-day average trading volume for FedEx shares as of August 4, 2014, it would take two days for the pledged shares to be sold in the open market. Furthermore, Mr. Smith’s unpledged share ownership is very substantial and would likely be able to prevent any margin call."
How it went:
"As a result of the stock price decline during fiscal 2020, Mr. Smith was granted approval to pledge additional shares in March 2020."
My favorite story:
FedEx doesn't allow BoD/executives to pledge stock for margin loans. But they will make exceptions on a case-by-case basis. They only made on exception, (then) CEO Fred Smith.
How it started:
"In accordance with our policy, Mr. Smith has established his financial capacity to repay the loan without resorting to the pledged shares. In the unlikely event such a sale were necessary, based on the 30-day average trading volume for FedEx shares as of August 4, 2014, it would take two days for the pledged shares to be sold in the open market. Furthermore, Mr. Smith’s unpledged share ownership is very substantial and would likely be able to prevent any margin call."
How it went:
"As a result of the stock price decline during fiscal 2020, Mr. Smith was granted approval to pledge additional shares in March 2020."
Right in your own quote, options were excluded so this doesn’t alter that.
Thank you. I've been looking for this in every news story posted since the verdict.
Does anyone know where the cancelled shares go? Back to Tesla? I assume he can get a massive tax refund now?
Does anyone know where the cancelled shares go? Back to Tesla? I assume he can get a massive tax refund now?
These are options, not shares, so I think they simply cease to exist.
The options cease to exist. Tesla has 50 billion is shares earmarked for elon, which it no longer has to pay out, this means the shareholders made 50B
[deleted]
The court opinion is surprisingly readable. I don't know why, but I was expecting a lot more opaque lawyerly jargon.
TLDR : The process used to decided the comp package was flawed (mainly because of the conflict of interest from the people negotiating on behalf of tesla) and the comp package itself can't be justified by objective metrics
TLDR : The process used to decided the comp package was flawed (mainly because of the conflict of interest from the people negotiating on behalf of tesla) and the comp package itself can't be justified by objective metrics
She's a good writer, and always has been. Most of her opinions are written in clear, plain, understandable way because as the chief judge she sees it as her job to try to set the standard for how the court should behave
Yeah, she’s an excellent communicator. Many of her opinions are also pretty funny too (relatively speaking, of course).
I find they usually are including SCOTUS decisions. I would encourage everyone to read at least some of them.
It's a shame starting law programs requires an undergrad degree in most of the country. Otherwise more people may be encouraged to get involved particularly later in life.
It's a shame starting law programs requires an undergrad degree in most of the country. Otherwise more people may be encouraged to get involved particularly later in life.
> The court opinion is surprisingly readable. I don't know why, but I was expecting a lot more opaque lawyerly jargon.
As a European person, this is the kind of pleasant surprises I expect to hear from America
As a European person, this is the kind of pleasant surprises I expect to hear from America
[deleted]
Thank you for this. I instinctively avoided the link due to same expectations of illegible jargon. After I read your comment, I read the court opinion and found it almost too informal!
Which in itself makes the entire ruling a farce by this judge.
A court opinion should not be the same as a opinion news article posted on CNBC.
A court opinion should not be the same as a opinion news article posted on CNBC.
[deleted]
Is there a precedent of the sort? I am curious of the long term effect of this ruling in CEO effect. Especially since the burden of proof/justification actually falls on the board. It might make it harder for captured boards to reward CEOs
If a board following the (well defined) process, the board is, under Delaware law, entitled to famously broad deference to their decisions. If they can’t run an aboveboard process and procure the necessary shareholder approvals, then that’s probably in a lot of cases a pretty good sign that they’re not really doing their job as a board very effectively.
What happens next financially? Does 6% worth of volume disappear from Tesla tomorrow and the stock price increase 6%?
Not if he threatens to quit Tesla to start a competing car company out of spite.
I kind of doubt he'd do that. AFAIK most of Elon's wealth is in Tesla shares, and a lot of them are pledged against loans. If his Tesla shares go done seriously in value that could leave him open to margin calls.
Over time, he may be able to unload those Tesla shares, making him less tied to the company, but I'd guess it'd take a while to sell that stock without risking a serious share price drop.
Over time, he may be able to unload those Tesla shares, making him less tied to the company, but I'd guess it'd take a while to sell that stock without risking a serious share price drop.
In 2018, 80% of the TSLA shareholders voted favor of a compensation plan that would pay Elon $56 billion if the company met certain goals.
As of 2023, these goals have been met, and yet, the judge will rule in favor of a shareholder who holds 9 TSLA shares that the plan is excessive and should be voided.
Interesting, isn't it.
As of 2023, these goals have been met, and yet, the judge will rule in favor of a shareholder who holds 9 TSLA shares that the plan is excessive and should be voided.
Interesting, isn't it.
> Of course, Tesla shareholders voted for the plan, but the judge found that “the defendants were unable to prove that the stockholder vote was fully informed because the proxy statement inaccurately described key directors as independent and misleadingly omitted details about the process." [0]
I think the argument was that the vote wasn't valid because the the voters weren't properly informed and that Tesla didn't actually try to negotiate too hard to get a better deal for shareholders.
That being said, I have no idea about the law surrounding this stuff, just trying to add more context.
[0]: https://electrek.co/2024/01/30/elon-musk-billion-tesla-ceo-c...
I think the argument was that the vote wasn't valid because the the voters weren't properly informed and that Tesla didn't actually try to negotiate too hard to get a better deal for shareholders.
That being said, I have no idea about the law surrounding this stuff, just trying to add more context.
[0]: https://electrek.co/2024/01/30/elon-musk-billion-tesla-ceo-c...
Can anyone make an objective case that this was a bad deal for share holders?
I’m not sure what your point is. There’s a well established standard in Delaware for upholding conflicted transactions and the process for cleansing them ex ante. That this particular transaction lifted the tide for all boats doesn’t mean that all, most or even many similarly conflicted transactions result in a positive amount of value creation for non-controlling shareholders.
What I think is more interesting is how the duties imposed on controllers, directors and officers of Delaware corporations are, in my opinion, one of the key factors that have directly contributed to such a massive creation of wealth over most of the past century that $56 billion is a merely a drop in the very large bucket.
Delaware as a venue for capital formation and value accretive corporate norms works so well that I’d think anyone raising third party capital would welcome the enforcement by all shareholders, whether they hold a million shares or just a single one.
What I think is more interesting is how the duties imposed on controllers, directors and officers of Delaware corporations are, in my opinion, one of the key factors that have directly contributed to such a massive creation of wealth over most of the past century that $56 billion is a merely a drop in the very large bucket.
Delaware as a venue for capital formation and value accretive corporate norms works so well that I’d think anyone raising third party capital would welcome the enforcement by all shareholders, whether they hold a million shares or just a single one.
Hardly. The judge's ruling took this vote into account. Did those 80 percent of shareholders act under the belief that the compensation committee was independent and was making a recommendation in line with that independence? That's the issue. One of trickery and deception and conflicts of interest.
[deleted]
Let's say you invested in Tesla for your pension and you see that the board give Must 3.5 years of company profits as bonus, nullifying any company profit for that time:
"Tesla ended Q4 2023 with a net income of $7.9 billion and the full year with $15 billion in profits" , that money is more 3 years of profit, meaning that the company , after that compensation, must wait almost 4 years, if the trend remains that one, to generate profit !
Are you happy in that case ? EV market is now more competitive, it's no more the time when Tesla was founded, Mercedes has a better autonomous guidance system, there are plenty of alternative EV brands, moving that kind of money int the pocket of one of the owners a good move or you are crippling the company because you are taking away money could be user for R&D, for example, killing the company in years ?
Or you think they are slowly burning your savings. Maybe you are not a billionaire, that are all your saving.
Let's go further, most lucrative automaker is Toyota, Tesla is 5 position under in that top 10. If I take the CEO of Toyota, giving him double salary, to manage Tesla, without 55 billion bonus, will the company be mismanaged ? I don't think so, Musk isn't the only "genius" able to run a carmaker company and, in fact, there are at least 6 guys are doing a better job. Obviously there is the marketing benefit of the Musk brand associated to Tesla, but, men, 55B$, is it worth ???
IMHO, he did need money for Twitter and used Tesla as his own wallet, ignoring correct management practices and acting not in best interest of the company , de facto crippling its grown. Plus, CEO also owning company big shares percentage, often reduce their salary and benefits because , you know, it's your best interest work to increase company value because that enrich yourself.
So I really don't understand because someone think judge's sentence is unfair : again , I have shares in a company where the same happen, I also call my lawyer. Also, I expect that the judge deliberate to guarantee the rights of all shareholders, independently by the quote they own and in the best interest of the company existence and grown. Think the judge did, IMHO.
"Tesla ended Q4 2023 with a net income of $7.9 billion and the full year with $15 billion in profits" , that money is more 3 years of profit, meaning that the company , after that compensation, must wait almost 4 years, if the trend remains that one, to generate profit !
Are you happy in that case ? EV market is now more competitive, it's no more the time when Tesla was founded, Mercedes has a better autonomous guidance system, there are plenty of alternative EV brands, moving that kind of money int the pocket of one of the owners a good move or you are crippling the company because you are taking away money could be user for R&D, for example, killing the company in years ?
Or you think they are slowly burning your savings. Maybe you are not a billionaire, that are all your saving.
Let's go further, most lucrative automaker is Toyota, Tesla is 5 position under in that top 10. If I take the CEO of Toyota, giving him double salary, to manage Tesla, without 55 billion bonus, will the company be mismanaged ? I don't think so, Musk isn't the only "genius" able to run a carmaker company and, in fact, there are at least 6 guys are doing a better job. Obviously there is the marketing benefit of the Musk brand associated to Tesla, but, men, 55B$, is it worth ???
IMHO, he did need money for Twitter and used Tesla as his own wallet, ignoring correct management practices and acting not in best interest of the company , de facto crippling its grown. Plus, CEO also owning company big shares percentage, often reduce their salary and benefits because , you know, it's your best interest work to increase company value because that enrich yourself.
So I really don't understand because someone think judge's sentence is unfair : again , I have shares in a company where the same happen, I also call my lawyer. Also, I expect that the judge deliberate to guarantee the rights of all shareholders, independently by the quote they own and in the best interest of the company existence and grown. Think the judge did, IMHO.
You misunderstand. Musk received equity (shares), not profit. Under his leadership the value of those shares reached $50B.
Tesla's market cap grew from $40B in 2019 to $1.2 Trillion at its peak in 2021. Now it's at $600B today. That is the total value of all Tesla shares which is now 15 times more valuable than it was in 2019. https://companiesmarketcap.com/tesla/marketcap/
Tesla's market cap grew from $40B in 2019 to $1.2 Trillion at its peak in 2021. Now it's at $600B today. That is the total value of all Tesla shares which is now 15 times more valuable than it was in 2019. https://companiesmarketcap.com/tesla/marketcap/
> Let's say you invested in Tesla for your pension and you see that the board give Must 3.5 years of company profits as bonus, nullifying any company profit for that time:
That’s irrelevant and wrong. First, they don’t give profits, they were options grants for equity which dilutes shareholders. Second, profits aren’t divided amongst shareholders because they don’t pay dividends.
Your pension got a 10x gain from this agreement if it was invested and voted for it. Now the agreement is being withdrawn but your pension will keep the 10x. If you can’t see how that can be seen as unfair, I don’t know what to tell you.
Musk led the company through a moonshot goal and the argument is “eh, we said we would give you a huge bonus for doing this but you’re already invested”. It’s not meaningfully different from taking away a software engineer’s options because they have a bunch of vested stock because “they already have skin in the game”.
The conflict of interest is the only thing with merit. The fairness arguments are complete bullshit and will set a terrible precedent on their own.
That’s irrelevant and wrong. First, they don’t give profits, they were options grants for equity which dilutes shareholders. Second, profits aren’t divided amongst shareholders because they don’t pay dividends.
Your pension got a 10x gain from this agreement if it was invested and voted for it. Now the agreement is being withdrawn but your pension will keep the 10x. If you can’t see how that can be seen as unfair, I don’t know what to tell you.
Musk led the company through a moonshot goal and the argument is “eh, we said we would give you a huge bonus for doing this but you’re already invested”. It’s not meaningfully different from taking away a software engineer’s options because they have a bunch of vested stock because “they already have skin in the game”.
The conflict of interest is the only thing with merit. The fairness arguments are complete bullshit and will set a terrible precedent on their own.
Musk is getting robbed. At the time, everyone believed the challenges were too big to surmount and he would never actually achieve them.
He does and suddenly "oh the reward is far too much"?
He does and suddenly "oh the reward is far too much"?
Tesla was planning and projecting that it would meet the milestones in Elon's pay package before it was offered. They were not seen as insurmountable or unachievable goals, that was part of what made this case. Quoting the court's opinion:
> "During the December 12 meeting, the Board also reviewed Tesla’s then-current operating plan and projections. Ahuja developed, and Musk approved, the projections in December prior to the meeting (the “December 2017 Projections”). The one-year projections underlying the operating plan forecasted $27.4B in total revenue and $4.3B in adjusted EBITDA by late 2018, and thus predicted achievement of three milestones in 2018 alone. The three-year long-run projections (“LRP”) underlying that plan reflected that, by 2019 and 2020, Tesla would achieve seven and eleven operational milestones, respectively."
> "During the December 12 meeting, the Board also reviewed Tesla’s then-current operating plan and projections. Ahuja developed, and Musk approved, the projections in December prior to the meeting (the “December 2017 Projections”). The one-year projections underlying the operating plan forecasted $27.4B in total revenue and $4.3B in adjusted EBITDA by late 2018, and thus predicted achievement of three milestones in 2018 alone. The three-year long-run projections (“LRP”) underlying that plan reflected that, by 2019 and 2020, Tesla would achieve seven and eleven operational milestones, respectively."
I remember very clearly what everyone thought as it all happened in 2018. No one thought they could actually achieve all of the milestones. Everyone knows how much Musk overpromises. That they have is incredible and makes Musk totally deserving of the compensation.
I dunno, the poster you replied to brought receipts: they cited the evidence proving them correct.
A court took those citations, and judged what the poster said to be correct, settling the matter. So the poster you're responding to is officially, legally correct.
What do you think about the evidence and decision made based on the evidence above? It seems many people remember very clearly what everyone thought, and it was that the goals were achievable. Do you believe the above evidence cited, was falsified?
A court took those citations, and judged what the poster said to be correct, settling the matter. So the poster you're responding to is officially, legally correct.
What do you think about the evidence and decision made based on the evidence above? It seems many people remember very clearly what everyone thought, and it was that the goals were achievable. Do you believe the above evidence cited, was falsified?
Here is a NYT article from 2018 that seems to very much vindicate grandparent's memory: https://www.nytimes.com/2018/01/23/business/dealbook/tesla-e...
> If Mr. Musk were somehow to increase the value of Tesla to $650 billion — a figure many experts would contend is laughably impossible and would make Tesla one of the five largest companies in the United States, based on current valuations — his stock award could be worth as much as $55 billion (assuming the company does not issue any more shares over the next decade, which is unrealistic). Even reaching several of the milestones would bring him billions.
> Mr. Musk’s critics — and there are many — are likely to contend that the new compensation plan is just the company’s latest publicity stunt. He has been called a modern-day P.T. Barnum who has created the illusion of success while consistently missing production estimates. The company continues to lose money; at one point last year, it was losing almost a half-million dollars an hour, according to Bloomberg News. Jim Chanos, a short-seller who has bet against Tesla’s shares — and has thus far been on the losing side of that trade — has contended that Tesla is worthless.
Do you believe the article above is consistent with the idea that everyone thought the goals were achievable?
> If Mr. Musk were somehow to increase the value of Tesla to $650 billion — a figure many experts would contend is laughably impossible and would make Tesla one of the five largest companies in the United States, based on current valuations — his stock award could be worth as much as $55 billion (assuming the company does not issue any more shares over the next decade, which is unrealistic). Even reaching several of the milestones would bring him billions.
> Mr. Musk’s critics — and there are many — are likely to contend that the new compensation plan is just the company’s latest publicity stunt. He has been called a modern-day P.T. Barnum who has created the illusion of success while consistently missing production estimates. The company continues to lose money; at one point last year, it was losing almost a half-million dollars an hour, according to Bloomberg News. Jim Chanos, a short-seller who has bet against Tesla’s shares — and has thus far been on the losing side of that trade — has contended that Tesla is worthless.
Do you believe the article above is consistent with the idea that everyone thought the goals were achievable?
You only need to look to the “thinking of taking the company private” debacle to see how little confidence there was in Tesla achieving these goals.
Wtf do you mean "suddenly"? The lawsuit was filed almost immediately after the pay package was approved.
Also wtf do you mean everyone believed? The company's own plan has then easily hitting like 80% of the goals in just two years. We're they lying about that? Hell, maybe that's just as bad or worse.
Also wtf do you mean everyone believed? The company's own plan has then easily hitting like 80% of the goals in just two years. We're they lying about that? Hell, maybe that's just as bad or worse.
The revisionism is sickening
i. Tesla’s Elon Musk May Have Boldest Pay Plan in Corporate History http://web.archive.org/web/20180208004856/https://www.nytime...
ii. Tesla’s Pay Deal to Keep Elon Musk: All or Nothing https://www.cnbc.com/2018/01/23/teslas-pay-deal-to-keep-elon...
i. Tesla’s Elon Musk May Have Boldest Pay Plan in Corporate History http://web.archive.org/web/20180208004856/https://www.nytime...
ii. Tesla’s Pay Deal to Keep Elon Musk: All or Nothing https://www.cnbc.com/2018/01/23/teslas-pay-deal-to-keep-elon...
Which of my points do either of those refute? The suddenly one certainly not. And the other? That the company itself projected hitting almost all the milestones in just a couple years? Not that one either.
I have a feeling Elon musk being the richest billionaire will bully Richard Tornetta to teach him a lesson.
Billionaires are powerful people, and people can be very petty when someone goes against their ego.
Billionaires are powerful people, and people can be very petty when someone goes against their ego.
The guy that sued and just made Elon Musk lose 55 Billion dollars only had:
NINE SHARES OF TESLA STOCK.
NINE SHARES OF TESLA STOCK.
HE ALSO SUED ON June 5, 2018.
As someone who made a million dollars on Tesla stock, I'm ready to backdate a new package with better language any time.
I am glad he's staying on, even without the compensation package, just like many said he would (proving the package was excessive), and is still going to perform as CEO, just like many said he would (again proving that the package was excessive).
I am skeptical he would be able to extract the same amount of value from out of the pockets of shareholders and into his, without resorting to the fraud he used to gain shareholder approval the first time. We'll see!
I am skeptical he would be able to extract the same amount of value from out of the pockets of shareholders and into his, without resorting to the fraud he used to gain shareholder approval the first time. We'll see!
The apparent "fraud" was that the board was not independent not that the package was unfair to shareholders. I would absolutely vote for any compensation package that payed a CEO 1% per doubling of my investment.
Shareholders will pass a package that contains appropriate legalese so that the options will be reinstated. We can afford it.
Shareholders will pass a package that contains appropriate legalese so that the options will be reinstated. We can afford it.
There's no need to put fraud in quotes, or inappropriately add "apparent". In fact, let's capitalize it to drive the point home: elmu Definitely Committed Fraud to try to trick shareholders into forking over tens of billions of their own wealth, directly into his pockets. It was an open and shut case, and he was judged guilty of having done so. I doubt shareholders will pass it again*, since the way he got it to pass the first time was by defrauding them. Remember: elmu committed fraud (multiple times, this is just the latest!) There's no escaping that. He's a fraudster in the eyes of the law (though perhaps not in the eyes of his fans).
As for your investment, just imagine how much it's worth now that 50 billion dollars of company wealth is staying with the company and investing in even higher returns (!) rather than into elmu's pocket, so he can waste it on another twitter on which to shitpost. elmu having that money wouldn't have increased the stock price over him not having it, but the company having it, probably will. So congrats on your increased future wealth!
Remember, too, the judge found, according to the evidence, including elmu and tesla's own statements, that he was motivated to perform even without the additional 50 billion in compensation on top of his existing compensation. So there was never any risk of him performing differently with or without, as judged by the judge of the matter.
* Honestly, I doubt it'll even get to a vote, and that he'll even be offered the same package when he has to negotiate against new people representing the interests of shareholders, rather than "negotiating" (*wink*) against his friends.
As for your investment, just imagine how much it's worth now that 50 billion dollars of company wealth is staying with the company and investing in even higher returns (!) rather than into elmu's pocket, so he can waste it on another twitter on which to shitpost. elmu having that money wouldn't have increased the stock price over him not having it, but the company having it, probably will. So congrats on your increased future wealth!
Remember, too, the judge found, according to the evidence, including elmu and tesla's own statements, that he was motivated to perform even without the additional 50 billion in compensation on top of his existing compensation. So there was never any risk of him performing differently with or without, as judged by the judge of the matter.
* Honestly, I doubt it'll even get to a vote, and that he'll even be offered the same package when he has to negotiate against new people representing the interests of shareholders, rather than "negotiating" (*wink*) against his friends.
I hope you take the time to understand why you are wrong when the compensation package with altered language is passed overwhelmingly by shareholders.
My Tesla investment has gone up 1200% and extra 10% means nothing to me. The deal we shareholders struck with the CEO in 2018 was more than fair and I was not cheated in any way. My daughters will never have to endure the drudgery I did thanks to Tesla, one of the greatest and fastest growing manufacturing companies in the history of the world. Weaseling out of the compensation package that made it happen because a judge thinks I didn't know Musk's brother wasn't an independent board member is absurd.
It's amazing to me that people can't just look at the numbers and understand why the pay package was a great deal. I hope that when the shareholders re-approve it you take a step back and try to understand why Tesla is such a special company.
My Tesla investment has gone up 1200% and extra 10% means nothing to me. The deal we shareholders struck with the CEO in 2018 was more than fair and I was not cheated in any way. My daughters will never have to endure the drudgery I did thanks to Tesla, one of the greatest and fastest growing manufacturing companies in the history of the world. Weaseling out of the compensation package that made it happen because a judge thinks I didn't know Musk's brother wasn't an independent board member is absurd.
It's amazing to me that people can't just look at the numbers and understand why the pay package was a great deal. I hope that when the shareholders re-approve it you take a step back and try to understand why Tesla is such a special company.
Now imagine the good that 50 billion more dollars is going to do Tesla and shareholders, rather than elmu. Imagine: Tesla making more, better new models, instead of elmu buying gab and shitposting there next. Imagine: Tesla expanding their charger technology and network, instead of elmu bribing more sexual harassment victims with more racehorses ("hush-horses", perhaps? ;). Our families are going to do so much better now that that money is in the right hands, and I am happy for both of us: we're now both, literally, materially, better off by the 50B alone, soon to be moreso after Tesla invests it into Tesla instead of forking it over to a shitposting, sexually harassing fraudster.
> The deal we shareholders struck with the CEO in 2018 was more than fair and I was not cheated in any way.
It wasn't, as judged by the judge [0], and you were, as judged by the judge [0]. It sounds like you're saying that you're okay with elmu having defrauded you (inarguable at this point, what with the judge's judgement [0]). Or maybe that you don't like how the judge of the matter judged the matter. Both of those are different from him not doing it. Also, it wasn't struck by shareholders, it was struck corruptly between elmu and his friends, as judged by the judge [0], and then only approved by shareholders after elmu's defrauding of shareholders, as judged by the judge [0].
Yes, elmu is legally a multiple time fraudster, and no amount of bare assertions to the contrary will change that fact, and no amount of spouting "wrong!" at people who point that out will change that fact, and no amount of insulting me on HN will change that fact. Consider bringing references next time you make such a claim (especially about me personally), like I did, in citing the judgement which describes elmu's latest legal fraud [0].
[0]: (PDF warning) https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rpaOEefQ...
> The deal we shareholders struck with the CEO in 2018 was more than fair and I was not cheated in any way.
It wasn't, as judged by the judge [0], and you were, as judged by the judge [0]. It sounds like you're saying that you're okay with elmu having defrauded you (inarguable at this point, what with the judge's judgement [0]). Or maybe that you don't like how the judge of the matter judged the matter. Both of those are different from him not doing it. Also, it wasn't struck by shareholders, it was struck corruptly between elmu and his friends, as judged by the judge [0], and then only approved by shareholders after elmu's defrauding of shareholders, as judged by the judge [0].
Yes, elmu is legally a multiple time fraudster, and no amount of bare assertions to the contrary will change that fact, and no amount of spouting "wrong!" at people who point that out will change that fact, and no amount of insulting me on HN will change that fact. Consider bringing references next time you make such a claim (especially about me personally), like I did, in citing the judgement which describes elmu's latest legal fraud [0].
[0]: (PDF warning) https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rpaOEefQ...
You keep talking about the judgement. You don't have any clue about the actual award. The shareholders crushed it. I have financial freedom forever because of it. You think we're going to claw back what's fair because of a technicality.
50 billion is not important to Tesla's growth, we already run the most capital efficient R&D in history. Apple spends more than than that per quarter on R&D and they still fail to innovate. Tesla's manufacturing innovation success is down to innovation not spending. You could put Musk in charge of apple and he would save you 50 billion on the first day.
Look at Facebook, they were going full tilt on some weird virtual world, blowing 10 billion a quarter on it. Then after Musk fired 80% of twitter eliminating bloat, every tech company followed suit and now Facebook is absolutely killing it. Focus and leadership matter more.
The strange conflation of hatred for musk as a person with stupid ideas about what shareholders in his companies should do should stop. The dude is an asshole but he is hands down the greatest capital allocator in the history of the world.
50 billion is not important to Tesla's growth, we already run the most capital efficient R&D in history. Apple spends more than than that per quarter on R&D and they still fail to innovate. Tesla's manufacturing innovation success is down to innovation not spending. You could put Musk in charge of apple and he would save you 50 billion on the first day.
Look at Facebook, they were going full tilt on some weird virtual world, blowing 10 billion a quarter on it. Then after Musk fired 80% of twitter eliminating bloat, every tech company followed suit and now Facebook is absolutely killing it. Focus and leadership matter more.
The strange conflation of hatred for musk as a person with stupid ideas about what shareholders in his companies should do should stop. The dude is an asshole but he is hands down the greatest capital allocator in the history of the world.
> You keep talking about the judgement
That's to be expected in a HN story and discussion literally about the judgement. Two parties disagreed, and a judge listened to both sides, judged the disagreement, and came to a judgement on the facts of the case (stated in my above), and on which one of the parties was right, and which was wrong.
Maybe you think shareholders will re-approve an agreement re-negotiated with new directors, and this time he can't defraud shareholders, but I doubt it, and it's not really relevant here. The clawback is done, on behalf of shareholders. I appreciate the shareholder who brought the lawsuit on my behalf. I get everything I had before, plus 50 billion dollars worth of wealth is going to make us, rather than elmu, more money. Win-win (for us)!
The rest of the post is mostly fawning over musk [0][1] and opinions about the nature of reality which were carefully considered and then overruled by the judge. It really feels like some folks are having trouble accepting the realities that the judge laid down about how elmu defrauded shareholders. How else to say it?: If someone disagrees with anything the judge said in their judgement [2], that someone is incorrect.
The shareholders did indeed crush it, with this ruling. This was a shareholder lawsuit brought against elmu for acting against the interests of the shareholders, and he lost, because that's precisely what he did. You personally being okay with it, doesn't change that. The article here is a good link, but I encourage you to read the judgement against elmu in full – that is linked for you in my above post, as well as below [2].
Also, looks like you played the '"hatred" for musk' card. That gives me a bingo!
[0]: "You could put Musk in charge of apple and he would save you 50 billion on the first day – I think we both know he'd try to cost apple 50 billion too, like he did Tesla, which he'd spend on another social network to shitpost on instead of doing an actual job. It's not like he actually innovates ('lol look at my kitchen sink joke and anti-semetic conspiracy theories what an innovation'). Apple would keep on keeping on with or without this particular inflammatory figurehead, just like Tesla would.
[1]: the theory about his huge twitter failure causing their competitor to succeed, and this is somehow an indication of his good management, is... interesting :)
[2]: (PDF warning) https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rpaOEefQ...
That's to be expected in a HN story and discussion literally about the judgement. Two parties disagreed, and a judge listened to both sides, judged the disagreement, and came to a judgement on the facts of the case (stated in my above), and on which one of the parties was right, and which was wrong.
Maybe you think shareholders will re-approve an agreement re-negotiated with new directors, and this time he can't defraud shareholders, but I doubt it, and it's not really relevant here. The clawback is done, on behalf of shareholders. I appreciate the shareholder who brought the lawsuit on my behalf. I get everything I had before, plus 50 billion dollars worth of wealth is going to make us, rather than elmu, more money. Win-win (for us)!
The rest of the post is mostly fawning over musk [0][1] and opinions about the nature of reality which were carefully considered and then overruled by the judge. It really feels like some folks are having trouble accepting the realities that the judge laid down about how elmu defrauded shareholders. How else to say it?: If someone disagrees with anything the judge said in their judgement [2], that someone is incorrect.
The shareholders did indeed crush it, with this ruling. This was a shareholder lawsuit brought against elmu for acting against the interests of the shareholders, and he lost, because that's precisely what he did. You personally being okay with it, doesn't change that. The article here is a good link, but I encourage you to read the judgement against elmu in full – that is linked for you in my above post, as well as below [2].
Also, looks like you played the '"hatred" for musk' card. That gives me a bingo!
[0]: "You could put Musk in charge of apple and he would save you 50 billion on the first day – I think we both know he'd try to cost apple 50 billion too, like he did Tesla, which he'd spend on another social network to shitpost on instead of doing an actual job. It's not like he actually innovates ('lol look at my kitchen sink joke and anti-semetic conspiracy theories what an innovation'). Apple would keep on keeping on with or without this particular inflammatory figurehead, just like Tesla would.
[1]: the theory about his huge twitter failure causing their competitor to succeed, and this is somehow an indication of his good management, is... interesting :)
[2]: (PDF warning) https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rpaOEefQ...
I hope you reflect on this post when the new compensation package is adopted by an overwhelming majority.
Sadly many poorly informed people lack the capacity to change their minds.
Sadly many poorly informed people lack the capacity to change their minds.
https://www.sec.gov/Archives/edgar/data/1318605/000119312518...
In particular, this part:
The Compensation Committee has overall responsibility for recommending to our Board the compensation of our Chief Executive Officer and determining the compensation of our other executive officers. Members of the Compensation Committee are appointed by our Board. Currently, the Compensation Committee consists of four members of our Board: Brad Buss, Robyn Denholm, Ira Ehrenpreis and Antonio Gracias, none of whom is an executive officer of Tesla, and each of whom qualifies as (i) an “independent director” under the NASDAQ Stock Market Rules and (ii) an “outside director” under Code Section 162(m).