Tesla pushes for $56B pay deal for Elon Musk 20240417_1621BST(bbc.co.uk)
bbc.co.uk
Tesla pushes for $56B pay deal for Elon Musk 20240417_1621BST
https://www.bbc.co.uk/news/articles/cqqndqndpq5o
18 comments
Is it going to fail exactly same as last one, because board of directors is still not independent?
They changed to be Incorporated in Texas. Texas is corporation friendly.
I don't think that ever happened. As far I understood, problem is that Delaware will tax you up to certain amount and then you are tax free, while Texas will tax you a lot without any upper limit, so incorporating in Texas would breach fiduciary duty and warrant another lawsuit from shareholders.
Corporation or investor friendly? What does corporation friendly even mean in this context? Good for the shareholders or good for the CEO?
From all the Musk simping, I’m gonna go on a whim that a lot people here didn’t read the verdict. At a minimum, I recommend the first handful of pages. It explicitly talks about why the judge voided this. Musk made a boat load of money to begin with from the valuation appreciation. The question was, does the extra 56B provide required incentives for Musk to do his job. The answer was determined to be no, he already owned over 20% of the company. In addition, the board was not doing its job to protect its shareholders since the board has heavy personal vested interests and relationships with Musk.
Good. Courts should not undermine shareholder consented contracts nor should the company be intimidated out of following through. Any minority shareholder who seriously disagreed with the 2018 compensation plan has had 6 years to trade out of the stock.
This is completely ignoring the contents of the ruling. I can only imagine deliberately so.
The ruling invalidated the pay package because it said the board did not disclose that it wasn't independent enough. This is a technicality. Every investor in Tesla knew this at the time (except for the activist investor and legal team that wants to steal 5 Billion from Tesla).
The pay package was just and fair given the deliverables. Any CEO who promises to 10x a company's revenues and market cap could easily get the same deal from shareholders.
The fairness of the deal is underlined by the fact that 99.9% of observers scoffed at it ever coming true. As a long term investor in Tesla (3500 shares @16$) I have seen thousands of negative posts like yours (Tesla sentiment has been ~95% negative over that entire time). In 2018 the sentiment on the stock was lower than it is even today. Many people mocked us investors as cultists, morons, suckers, rubes etc. They were wrong. I'm absolutely going to vote in favour of the compensation package in fulfillment of the deal which made me a millionaire.
The pay package was just and fair given the deliverables. Any CEO who promises to 10x a company's revenues and market cap could easily get the same deal from shareholders.
The fairness of the deal is underlined by the fact that 99.9% of observers scoffed at it ever coming true. As a long term investor in Tesla (3500 shares @16$) I have seen thousands of negative posts like yours (Tesla sentiment has been ~95% negative over that entire time). In 2018 the sentiment on the stock was lower than it is even today. Many people mocked us investors as cultists, morons, suckers, rubes etc. They were wrong. I'm absolutely going to vote in favour of the compensation package in fulfillment of the deal which made me a millionaire.
A $56 billion pay package is wholly unreasonable for anything less than solving world hunger. Nobody on earth today deserves that much money.
So... what? Should judges overturn all contracts they think are "unreasonable"?
Yes? That’s a big part of the judicial system. It’s a contract, not law.
Actually, yeah, judges do void Unconscionable Contracts on the regular.
I'm arguing from a moral standpoint, not a legal one.
The contract was conditional on price. At the time, no one thought it possible to achieve such valuation. So they deemed the payout likely to be zero i.e. 99.9% that the payout was zero.
You understand?
This is a bonus, conditional on performance. This is not a simple payout. The legal case MUST come up at the time of initiation of the contract else it induces moral hazard.
All of Delaware is now off limits for everyone for ever now.
This is like an insurance contract being voided because it was "too good of a payout" but they only void it when you get injured, your houes burns down etc becaues "oh we didn't realize it until we had to pay". But they collected premium all those years and nobody challenged it.
This is incredibly immoral. It is literally moral hazard.
You understand?
This is a bonus, conditional on performance. This is not a simple payout. The legal case MUST come up at the time of initiation of the contract else it induces moral hazard.
All of Delaware is now off limits for everyone for ever now.
This is like an insurance contract being voided because it was "too good of a payout" but they only void it when you get injured, your houes burns down etc becaues "oh we didn't realize it until we had to pay". But they collected premium all those years and nobody challenged it.
This is incredibly immoral. It is literally moral hazard.
IT WAS NOT A 56B PAY PACKAGE AT THE TIME!
READ THE DOCUMENT!
IT IS CONDITIONAL ON PRICE!
Deliberately misrepresenting things is evil. Please reread and reconsider.
READ THE DOCUMENT!
IT IS CONDITIONAL ON PRICE!
Deliberately misrepresenting things is evil. Please reread and reconsider.
$56 billion for Elon. Layoffs for the people who made his cars.