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Cathy Wood Rips the Delaware Court Finding Voiding Musk's $56B TSLA Compensation
Posted on 2/5/24 at 5:40 am
Posted on 2/5/24 at 5:40 am
quote:
the Delaware court decision, forcing #Tesla to void the March 2018 vote on Elon Musk’s performance-based pay package, is un-American, an assault on investor rights, and an insult to the Board of Directors of one of the most stunningly successful companies in US history.
...
Working with @ARKInvest’s General Counsel, who analyzed the 200+ page Delaware Court decision, I have concluded that legal nuances and the controversial interpretation of them have missed the forest for the trees, spectacularly and unfairly.
Tesla’s Board incentivized @elonmusk with a Herculean task that most analysts and auto manufacturers did not believe possible....
Agreeing to no salary during those five years, Elon also would have received much less performance-related compensation if he had achieved less than the lofty milestones associated with our bull case. Instead, he shocked and delighted shareholders.
Thanks to Elon’s ingenuity and dogged determination, Tesla hit our bull case target price in 2021, two years earlier than we anticipated. Since then, many shareholders have shared stories with us about how our research inspired their investment in $TSLA and changed their lives.
Compiled X thread / Standard X Link
5
Posted on 2/5/24 at 5:46 am to NC_Tigah
Elon is a Nazi-fascist-racist-homophobic-shitlord because he forced a popular social media platform to stop the partisan squelching of free speech. He must pay.
Posted on 2/5/24 at 6:53 am to NC_Tigah
quote:
Agreeing to no salary during those five years
Dude bet on himself, and gave his company the chance to do so as well (and to nick him if he failed).
frick this judge.
This post was edited on 2/5/24 at 6:54 am
Posted on 2/5/24 at 7:03 am to NC_Tigah
This ruling while not inside of a reorganization of the company seems fascist in nature. How can a government decide what is acceptable in a private business pay
Posted on 2/5/24 at 7:18 am to NC_Tigah
The Judge ruled that Tesla wasn't completely open with the shareholders about what they thought Musk's chances were of reaching the various compensation goals. A pretty ridiculous ruling on its face.
But since you can't go back in time to see if shareholders would have voted against the compensation package given extra information (I seriously doubt they would have), that leaves Tesla and Musk without any kind of reasonable remedy.
So I propose a remedy: Tesla estimates the hypothetical currrent share price if they had replaced Musk with a more mundane CEO by assuming Tesla stock would have performed the same as other auto manufacturers. Offer stock holders a one-time stock buyback opportunity at that price. Since the calculated alternate history price will likely be 25% of actual current stock price (or lower), nobody will accept the offer. Tesla then pays Musk per agreements, and everybody is happy.
But since you can't go back in time to see if shareholders would have voted against the compensation package given extra information (I seriously doubt they would have), that leaves Tesla and Musk without any kind of reasonable remedy.
So I propose a remedy: Tesla estimates the hypothetical currrent share price if they had replaced Musk with a more mundane CEO by assuming Tesla stock would have performed the same as other auto manufacturers. Offer stock holders a one-time stock buyback opportunity at that price. Since the calculated alternate history price will likely be 25% of actual current stock price (or lower), nobody will accept the offer. Tesla then pays Musk per agreements, and everybody is happy.
This post was edited on 2/5/24 at 7:19 am
Posted on 2/5/24 at 7:23 am to udtiger
quote:
Dude bet on himself, and gave his company the chance to do so as well (and to nick him if he failed).
frick this judge.
Pretty much.
Think of it as Andre Dawson signing a minimum deal with the Cubs circa 1987 just to get the frick out of Montreal, with the agreement that, if he produces, he gets a new deal.
Dawson won the NL MVP in 1987.
But now when it is time for him to get a new deal, somehow his original deal gets voided and he gets shipped back to Montreal.
Posted on 2/5/24 at 7:27 am to Nosevens
Its a publicly traded company, its not a private company.
Im still not sure how the judge CAN do this, but its an important distinction
Im still not sure how the judge CAN do this, but its an important distinction
Posted on 2/5/24 at 8:31 am to LSUnation78
quote:
Its a publicly traded company, its not a private company.
You too are missing a vital distinction. Tesla may be publicly traded, it is not a nationalized company.
While Tesla may be traded through a public exchange, the shares are held by the private sector (individuals and corporations--and don't try to weasel in an exception for government sector retirement plans).
The federal judge may be able to squash the compensation package for the CEO of Amtrac or the USPS (quasi-public entities), a corporation (like Tesla) doesn't become a subsidiary of the US Government just because the stock is traded on the NYSE or NASDAQ.
Posted on 2/5/24 at 8:45 am to LSUnation78
quote:
Its a publicly traded company, its not a private company.
Semantics confuses a lot of people
Posted on 2/5/24 at 8:52 am to LSUnation78
When is say private it meant not a government entity
Posted on 2/5/24 at 9:21 am to Nosevens
If we dont smell lawfare in this, we need some olfactory help.
Posted on 2/5/24 at 9:28 am to LSUnation78
Publicly traded but not government owned, therefore it is private. CEO compensation is voted on by shareholders but it is only an advisory vote that is non binding. So even if the shareholders voted no, the Board doesn’t have to follow, although unwise.
Posted on 2/5/24 at 9:33 am to NC_Tigah
On the one hand why does a guy that owns nearly a quarter of the company need more incentives to increase value? On the other, it seems the package was board approved and mostly shareholder approved, so the lone shareholder suit the court took up seems insufficient to overrule the board.
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