Sirwin
Sirwin

Judge voids Elon Musk's 'unfathomable' $56 billion Tesla pay package- Yahoo News


Long story short, a guy with 9 shares of Tesla has stopped Elon Musk from getting his 50 billion dollar payout.  A couple of highlights from the story:

  • "Never incorporate your company in the state of Delaware," Musk said in a post on X, the social media platform he bought in 2022.
  • Tesla directors argued during the trial that the company was paying to ensure one of the world's most dynamic entrepreneurs continued to dedicate his attention to the electric vehicle maker. Antonio Gracias, a Tesla director from 2007 to 2021, called the package "a great deal for shareholders".
  • Ross Gerber, president and CEO at Gerber Kawasaki Wealth & Investment Management and a Tesla investor, told Reuters the ruling showed the company needed to replace at least three directors with independent board members before it can negotiate a new pay package for Musk.
  • "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?" wrote Kathaleen McCormick of Delaware's Court of Chancery.
  • A Delaware judge tossed out Elon Musk's record-breaking $56 billion Tesla pay package on Tuesday, calling the compensation granted by the EV maker's board "an unfathomable sum" that was unfair to shareholders.

Full disclosure, I sold my Tesla stock in 2023.

I don't even know what I really think about this. 50 billion is such a large number, that really understanding it is hard to do. From a technical standpoint, this deal has been in place for years, if the company failed, Elon Musk would lose money. To have a judge say, essentially, I think that is too much money and you can't have it, is crazy to me.  Elon staked the money on a long shot, and now it is time to pay up.

From a "feelings" standpoint, if this was a case of "this is just too much money," it should have been decided when the deal was created, via a cap on earnings for Musk. Do you know why they didn't cap it? No one would believe Tesla would do what it has done. No one was complaining when the stock was skyrocketing. No one was suing Musk when everyone was happy and getting rich. Even going back in time, if Tesla knew what would happen after Musk came on board, I think they would make the same deal.  It is hard to argue with what Tesla has become. Did the judge say, to the guy suing, "Your 9 shares went up by 50x, you don't get to cash them, either. The return is just too high." Nope.

I heard once that when people reach the billionaire status, money is more about keeping score than actually payment for work.  If this is the case, Elon wants to win. He has also shown he will spend tens of billions to make a point. 

So, should Musk just drop it and take less money? Sure, he could probably offer to take half and spread the rest around and everyone would be happy.  The problem is, if he did that, he wouldn't be "Elon Musk" anymore.  He would be some guy not acting like the richest guy in the world. Tesla would be the worse for it in the long run.  Elon will make 50 billion into one trillion, and very few people can do that.

So, maybe I do know how I feel, give the guy his money.  We will be better in the long run to have a happy, productive Elon.

 

 

 

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SeventyFourSeventyFive
SeventyFourSeventyFive

I am an American aquarium drinker. I assassin down the avenue. I'm hiding out in the big city blinking. What was I thinking when I let go of you?


Interesting Thoughts, That Aren't Always Mine
Interesting Thoughts, That Aren't Always Mine

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