Elon’s $55Billion Tesla pay package voided [ADMIN WARNING: NO POLITICS / INSULTS].

[Sgt Beavis]

(Bloomberg) -- Elon Musk’s $55 billion pay package at Tesla Inc. was struck down by a Delaware judge after a shareholder challenged it as excessive, a ruling that would take a giant bite out of Musk’s wealth and put the fate of his companies in question.

That is if the ruling survives a likely appeal.

The decision Tuesday, which amounts to his first major loss in court, means that more than five years after the electric-car maker’s co-founder was granted the largest executive compensation plan in history, Tesla’s board will have to start over and come up with a new proposal. Musk never attempted to exercise his options since they’d been challenged in Delaware Chancery Court. Tesla’s share price slid about 3% in after-hours trading on the news.

Rest of the article here: https://www.msn.com/en-us/money/com...st-title-after-pay-package-voided/ar-BB1hvxrq

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[COdogman]

 

[Supratachophobia]

1. I didn't know a judge could do that.
2. Sounds like the court is sour for the whole Twitter purchase thing.
3. Yes, that number is excessive and probably one of the greatest contributions to income inequality between billionaires and those that work for them. But if that's what the agreement was (did the metrics get meet?), then that's what the agreement is. I bet a ton of people never thought he'd reach those milestones.

 

[manitou202]

1. I didn't know a judge could do that.
2. Sounds like the court is sour for the whole Twitter purchase thing.
3. Yes, that number is excessive and probably one of the greatest contributions to income inequality between billionaires and those that work for them. But if that's what the agreement was (did the metrics get meet?), then that's what the agreement is. I bet a ton of people never thought he'd reach those milestones.

Read the details and then come back.

The board of directors specifically broke Delaware laws that apply to their fiduciary responsibility and their CEO (Elon) broke laws regarding influencing the board. They also misled share holders by not disclosing required details of the arrangement. So the court voided the package.

The board of directors can put forward the same pay package again (assuming they follow the law this time) and put it to a shareholder vote.

 

[Donald Stanfield]

1. I didn't know a judge could do that.
2. Sounds like the court is sour for the whole Twitter purchase thing.
3. Yes, that number is excessive and probably one of the greatest contributions to income inequality between billionaires and those that work for them. But if that's what the agreement was (did the metrics get meet?), then that's what the agreement is. I bet a ton of people never thought he'd reach those milestones.

A public company is subject to legal oversight far beyond what a private company is. If a complaint is made, things like executive compensation are subject to board review and judicial review. If I own stock in a privately held company, I can distribute the income however I see fit, and a judge cannot overrule that; the rule there is whoever has a majority makes the rules so long as you aren't violating things like the Fair Labor Act and Equal Opportunity Employment rules.

In a public company, the board has to act as a fiduciary, which means they must act in the shareholder's best interests. A judge gets involved if a shareholder feels that Elon's compensation package isn't fair. Since Elon's compensation is the highest of any executive in history, he lost, but it's subjective, so it will be appealed.

 

[sub]

1. I didn't know a judge could do that.
2. Sounds like the court is sour for the whole Twitter purchase thing.
3. Yes, that number is excessive and probably one of the greatest contributions to income inequality between billionaires and those that work for them. But if that's what the agreement was (did the metrics get meet?), then that's what the agreement is. I bet a ton of people never thought he'd reach those milestones.

My understanding is that the ruling was that Elon and Tesla lied to the stockholders about facts that were necessary to understand the what they were voting to approve. Therefore, due to that fraud, the approval vote is void.

It seems totally fair to void the approval if the shareholders were lied to about what they were approving.

 

[Supratachophobia]

My understanding is that the ruling was that Elon and Tesla lied to the stockholders about facts that were necessary to understand the what they were voting to approve. Therefore, due to that fraud, the approval vote is void.

It seems totally fair to void the approval if the shareholders were lied to about what they were approving.

Elon lied?
<Shocked Pikachu>

 

[UnsungZero_OldTimeAdMan]

And the stock sank because of it, which is absurd. The company is not made of just one manchild.

 

[Supratachophobia]

And the stock sank because of it, which is absurd. The company is not made of just one manchild.

Tell that to the man child....

 

[Redline]

I'm still in belief that Elon is going to have to step down from Tesla for it to continue its growth.

 

[NY_Rob]

“The most striking omission from the process is the absence of any evidence of adversarial negotiations between the board and Musk concerning the size of the grant,”

“Swept up by the rhetoric of ‘all upside,’ or perhaps starry eyed by Musk’s superstar appeal, the board never asked the $55.8 billion question: Was the plan even necessary for Tesla to retain Musk and achieve its goals?” she (the judge) wrote.

 

[SDH]

Shareholders will have had to vote on this package (including Musk himself obvs.) so regardless of his stake and influence, it got voted through.

Now if it got voted through based on fraud/lies (call it what you will), then I agree it should be forfeit and subject to another round of voting through shareholders (including Mr. 13%).

The Board might well be weak and in Elon's pocket (I'm certain they are and their bank balances probably attest to that), but the Board only proposes (maybe even recommends), but it does not have the casting vote. Shareholders do.

If (and this is a big IF) a shareholder (or judge, or political movement) simply take the view that $55bn is an egregious amount of money for 1 person, well tough sh!t I'm afraid. I personally don't agree with a $1trn Inflation Reduction Act IMO, or $bns going to Ukraine but you don't see me calling the lawyers.

 

[Zorg]

What is the root of the issue? The lack of negotiations or that shareholders were misled? If misled, how was that misleading? Too lazy to read the judge decision.

Package is only huge in retrospect. Back then, almost no one expected most of those milestones to be met.

 

[Greg Chick]

I want equal laws applied to Musk and everyone. Lies are wrong, profit good, courts enforcing laws needed, greed being kept at bay. Stockholders having rights as per contract, profit sharing done as per lawful contracts.
Is this offensive? is what I say anti Capitalism? Is this "Liberal" ? Why is what I say needing to be said and why must I defend saying it?
Is Musk able to spend a couple million dollars a day for his whole life and still remain a billionaire really necessary?
I hope my post is not considered political or insulting. If it is, shoot me, or just erase this.

 

[NY_Rob]

Is Musk able to spend a couple million dollars a day for his whole life and still remain a billionaire really necessary?

If he indeed follows through and privately funds Mars colonization then he will need to spend even more than that daily. That's IF he follows through on that plan...

From NASA...
Humans to Mars Will Cost About “Half a Trillion Dollars” and Life Support Roughly Two Billion Dollars.

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