Judge Rules Against Elon's Pay Package [⚠️ ADMIN WARNING: NO POLITICS]

[HitchHiker71]

this bit of the ‘strategy’ is a bit unclear to me

while certainly things are different in Texas, it is hard to predict whether they are different in a way that are better or worse (for Tesla, Musk, or shareholders), depending on the issue at hand

I tend to think this squawking by musk results from a mixed combination of two things at once:

(1) just emotional “I’m taking my toys and going home” reactionary revenge (which Musk’s base, largely immune to nuance, will eat up as ‘another instance’ of Musk really sticking it to the man - though it’s unclear Delaware or Texas could give 2 sh*ts either way)

and

(2) strategic posturing for this reincorporation, the smell of revenge, etc., to help propel Musk/Tesla to at the same time make some other key corporate changes that - amidst all the fog and smell of gunpowder - get a bit overlooked. A sort of Pork Barrel opportunity.

Without a doubt it's a risk - but we know Texas is all over this - the governor himself posted on X that the vote is out - come on down to Texas! (paraphrasing)

Sometimes the devil we know is better than the devil we don't know yet - only time will tell. Musk is both an eternal optimist and an eternal opportunist - so I'd again vote for Option 2 above with this in mind. Never waste a good crisis right? IDK if Texas supports a dual stockholder class whereby Musk can be given the additional voting control he wants while avoiding the outsize compensation package issues. I cannot help but remind everyone on this point, that Musk already held almost 25% of Tesla shares before he sold off almost half of his stock to fund the Twitter acquisition - by his own choice. Now he wants more stock to get control back? What's the next Twitter acquisition/boondoggle with this in mind? Moral hazard comes to mind here...

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[heems]

You seem to be taking misinformed as an insult. It's not.

The misinformation from the board to the shareholders:

Page 82:

So unless you were on the board/committee and privy to that information, you (in the collective sense) were likely misinformed on the vote.

I am taking it as an insult but I think the wrong term is being used then. I was not misinformed. plaintiff are saying the proxy statement lied. It said directors were independent when they allegedly were not. I was / am under no illusion about who Musk knows or doesn’t outside the office. It’s impossible to know. But ok I’ll go with this “they lied” interpretation. It’s still lame that independency is a requirement when shareholders voted by majority but that’s another argument.

 

[DumpsterFire]

I just read through this thread and came away with two things

1. Don’t talk politics on this board (I like this point)

2. Do not fuck with the Elon Fanbois. They’ll swarm harder than the Beyhive…

Edit: Want to add one more thing.

3. The Canadians are getting spicy lately! Rarr!

 

[CyberGus]

• Build world's largest factory in Texas
• Moves HQ to Texas
• Lives in Texas
• Wants to reincorporate in Texas
• ...still can't sell in Texas

?

 

[BannedByTMC]

He didn't threaten anything, he just said he wants more influence over what he does.

Which if he didn't get he threatened to no longer work on AI and robotics at Tesla.

"Unless that is the case, I would prefer to build products outside of Tesla,"
That's an obvious threat to stop building those products inside Tesla. Remember when Elon said "You don’t have to read between the lines with me. I’m saying the lines! "?

 

[BannedByTMC]

I was not misinformed. plaintiff are saying the proxy statement lied. It said directors were independent when they allegedly were not. I was / am under no illusion about who Musk knows or doesn’t outside the office. It’s impossible to know.

You think it's impossible to know if he knows his brother? Just because you know the truth doesn't change the fact that someone lied to you. It's fine if you want to say you knew the truth and didn't care about the lies but you should understand that just maybe not everyone is going to be OK with the board lying to them.

 

[heems]

You think it's impossible to know if he knows his brother? Just because you know the truth doesn't change the fact that someone lied to you. It's fine if you want to say you knew the truth and didn't care about the lies but you should understand that just maybe not everyone is going to be OK with the board lying to them.

Is there a law in Delaware that all directors have to be independent ? I must have missed that. Means Tesla has an illegal board. Or it seems you are implying people are stupid and need to be told a relative is not independent. Ok.

 

[Deleted member 17810]

I am taking it as an insult but I think the wrong term is being used then. I was not misinformed. plaintiff are saying the proxy statement lied. It said directors were independent when they allegedly were not. I was / am under no illusion about who Musk knows or doesn’t outside the office. It’s impossible to know. But ok I’ll go with this “they lied” interpretation. It’s still lame that independency is a requirement when shareholders voted by majority but that’s another argument.

Well, that's the responsibility of the board and and committee that put together the package.

A couple of people recused themselves due to their close ties with musk. That's the intent of disclosure of close relationships.

 

[cvalue13]

Is there a law in Delaware that all directors have to be independent ? I must have missed that. Means Tesla has an illegal board. Or it seems you are implying people are stupid and need to be told a relative is not independent. Ok.

no, it's about requiring a certain degree of disclosure of info relevant to informed decision making

and the bigger the decision, the higher the scrutiny on the independence of the people recommending the decision - especially executive comp packages

this is why boards often form compensation committees. and in particular, why comp committees are generally assembled to have a sufficient number of legit independent members, who are given (often) a controlling vote on particularly important/potentially controversial comp decisions


you know, like attempting to issue the largest exec comp package in history by several orders of magnitude


and here's the catch: the easier it is to defend the comp package on the merits, the easier it is to find good independents to review it




from there, once you have a good comp committee together, the next guardrail is to have the (potentially biased) board members interact with the comp committee in as independent a manner as possible.

neither musk's brother (nor the divorce lawyer) were on the comp committee. they come into the story in the way they interacted with the comp committee, and in their own personal ties to people on the comp committee

 

[HitchHiker71]

I am taking it as an insult but I think the wrong term is being used then. I was not misinformed. plaintiff are saying the proxy statement lied. It said directors were independent when they allegedly were not. I was / am under no illusion about who Musk knows or doesn’t outside the office. It’s impossible to know. But ok I’ll go with this “they lied” interpretation. It’s still lame that independency is a requirement when shareholders voted by majority but that’s another argument.

It's all semantics really - but it's more that full disclosure was not provided - which is the legal requirement. I suppose a lie of omission is still a lie. It's not so much that independence is required as that this all must be fully disclosed in the proxy materials to all voters (not just you), and this was not the case in 2018 for the proxy vote on the compensation package in scope.

That said, independence has become an important element to help minimize problems for BoDs particularly when it comes to executive compensation - and as @cvalue13 said - this is why most larger companies form compensation committees that stand apart from the BoD itself - to provide a level of insulation and objectivity that the BoD itself may not possess.

 

[JBee]

Which if he didn't get he threatened to no longer work on AI and robotics at Tesla.

"Unless that is the case, I would prefer to build products outside of Tesla,"
That's an obvious threat to stop building those products inside Tesla. Remember when Elon said "You don’t have to read between the lines with me. I’m saying the lines! "?

Ignoring most of my post content and just quoting parts to perpetuate your narrative hardly forms a appropriate response.

 

[BannedByTMC]

Ignoring most of my post content and just quoting parts to perpetuate your narrative hardly forms a appropriate response.

The rest of your post had no bearing on the obvious threat Elon made. His motivation is irrelevant, he threatened to stop AI and robotics development at Tesla if he didn't get what he wants. That's a threat. If you don't understand that at this point there is nothing I can say to explain it any better and we just aren't going to agree on this point.

 

[JBee]

The rest of your post had no bearing on the obvious threat Elon made. His motivation is irrelevant, he threatened to stop AI and robotics development at Tesla if he didn't get what he wants. That's a threat. If you don't understand that at this point there is nothing I can say to explain it any better and we just aren't going to agree on this point.

He already started Xai months ago. OpenAi years beforehand. SpaceX does heaps of stuff Tesla doesn't? You know like rockets and stuff.

Or do you think it's not fair that EM is only the Chief rocket engineer for SpaceX??

That is not a threat. You could call him paranoid though given what's going on atm behind the scenes.

So put yourself in his shoes for just a minute...would you like it if somebody could take over the business you were fundamental at building and getting through to success? Wouldn’t you do something to avoid it?

Sure you can blame him for doing other things, like buying Twitter etc and losing his majority shares, but even that wasn't a straight deal, and it could well be a mistake. But if it were, and if he still want to progressla, what's stopping him from jumping ship prior to losing control anyway? Why should he go down with the sinking ship if someone else gets majority shares?

I'd be out there in a flash and do what I want without needing to worry about looking over my shoulder to see if someone is coming for me.

Call me crazy. But don't call me dumb.

 

[BannedByTMC]

He already started Xai months ago. OpenAi years beforehand. SpaceX does heaps of stuff Tesla doesn't? You know like rockets and stuff.

Correct, yet he still kept working on AI at Tesla, see the difference?

 

[JBee]

Correct, yet he still kept working on AI at Tesla, see the difference?

Tesla Cybertruck is mass production of Starship steel? This would be a loss for EMs plans to get to Mars?

Cross pollinating products is fine IF you stay in some form of control of both.

Pointless if you lose one though right?

He wants to get to Mars as #1 priority.

You don't have to share that vision, but you could consider it to be one for someone else, right? Even Columbus had to get funding for his expedition to find America?

Besides, it's actually irrelevant that you or anyone else "considers" it a threat or not. Except for using labels to make your narrative persuasive in this conversation.

Nobody can guarantee his continued existence anywhere, anyway, anyhow.
We are all mortal, and have our own will and desires that lead us on different paths, at differnt stages of our life.

Or is that not allowed over in your neck of the woods anymore?

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