Particularly when that 50b is more than the total profit the company has earned since inception. It’s unconscionable. And again, and most importantly, there’s absolutely nothing about his performance that even comes close to justifying such an award. As we speak Apple has just overtaken Microsoft to become the largest US company. Its market cap is getting on for five times that of Tesla as is Nvidia's as is Microsoft’s. None of the leaders of these companies, who have all created far more shareholder wealth, has or will receive compensation that’s even remotely close to the package that Musk demands. That the Tesla board has rubber stamped this is absolutely why the prior lawsuit succeeded. It’s a complete dereliction of their fiduciary responsibility.

 

If $50 billion is unconscionable, then why did shareholders vote for it? Was it less unconscionable 6 years ago or something?

 

It makes me wonder if Musk purposely have been deceiving the public with several claims to pump the stock such as FSD completion / Robo Taxis to meet the criterias / milestones of his pay package.

 

Aren't there a few companies that "never earned a profit" but are worth a ton of money and their ceo's are mega rich?

I put "never earned a profit" in quotes because I've heard this said while they are so mega wealthy and companies worth a fortune, Amazon(back in the day) for one?

 

Because as the judge concluded, the board misled shareholders about the deal and how difficult it was to achieve the targets that would drive the award. It wasn't rejected because the number was insane, it was rejected because of the failure of the board to be independent, their failure to represent the deal correctly and their failure to act in the best interests of shareholders. It's not really about the $50bn. It's about the failure of the process.

 

The questions you should be asking is how many of them are looking to award their CEO $50bn and, furthermore, are allowing their CEO to be a part time CEO, to effectively hold the business hostage with implicit threats to quit if the award is not granted, and/or to develop certain activities previously declared to be strategic to the business in other businesses that they own?

 

I'm trying to see all the moving pieces and you all know more of the details on this so I'm trying to keep up.

Based on what's going on and everything you all have said, what if, what if, what if, the expected compensation package was a calculated and perfectly timed exit strategy for Musk.

I mean c'mon, he had to anticipate many things such as...
Growth
Economic cycles
The inevitability of other mfgs eventually making EV's that are real competition

It may be the biggest coincidence in the world but if there was ever a time to cash out and bail.... I'm sorry, I not being negative on Elon but it could have been calculated and predicted.

It was genius if that's what he did and gets away with it.

 

So it's really hard for mere mortals like us to comprehend how big some numbers are, so here's one way to look at what Musk is asking for.

Since its IPO in 2010 and through the end 2023, Tesla has spent just over $18bn on R&D*. That's funded the development of all the products and services it sells. Model S, Model X, Model 3, Model Y, Cybertruck, FSD and more.

Musk is asking for around 2.5 times the total Tesla has ever spent on R&D since its IPO for himself. No board should sanction this, let alone recommend it to shareholders.

* https://www.statista.com/statistics/...nses-of-tesla/

 

Was this compensation package intended as "back payment" for services already rendered and due to be paid on a certain date, whether in cash or stocks?

And if so, what is the compensation going forward after this date?

PS, anyone have a number $$$ in mind that Elon should get, please post. I won't hazard a guess but interested in what you all think.

 

no, his comp was based on goals from 2018 onward that pretty much no one thought was possible.

but nonetheless, the company made the goals. i believe the 'compensation' as in mile based stock bonuses have already been paid out? which if so, it's unclear how he 'gives it back'. unexercised options can just be voided i guess.

it's easy to look NOW and say that's an outrageous amount, after the 'impossible' goals were achieved.

i've known many execs make FORTUNES from 'stretch' goals and other sales based incentive comp plans. happens all the time. yes this one is gigantic, but so is the accomplishment. anyway i guess we'll see how the vote goes soon.

 

Because they were persuaded to illegally by Musk through a board that lacked the independence required by law as a publicly traded company. That’s the whole point.

 

No, the board did not think that the goals were impossible. They knew the opposite, but they did not reveal this to shareholders.

From page 185 of the judgment:

"iv. The Ambitious Milestones

Defendants argue that the Grant price was fair because its milestones were

ambitious and difficult to achieve. The defense witnesses all testified in harmony

that the milestones were “audacious” and “extraordinarily ambitious.” Defendants

concede that three operational milestones aligned with internal projections but note

that the Company routinely missed projections.

It is hard to square Defendants’ coordinated trial testimony concerning Tesla’s

internal projections with the contemporaneous evidence. The Board deemed some

of the milestones 70% likely to be achieved soon after the Grant was approved.

This assessment was made under a conservative accounting metric, but there are

other indications that Tesla viewed its projections as reliable. They were developed

in the ordinary course, approved by Musk and the Board, regularly updated, shared

with investment banks and ratings agencies, and used by the Board to run Tesla.

Several Tesla executives affirmed their quality, accuracy, and reliability. Plus,

Tesla hit the first three milestones, consistent with its projections, by September 30, 2020.

Defendants bore the burden of proving fair price. Given the conflicting

testimony concerning the projections, Defendants failed to prove the factual predicate

for their argument that all the milestones were “ambitious” and difficult to achieve.

This argument does not support a finding of fair price"

 

Hit the nail on the head above.

 

This argument, with all due respect to everyone, has been beaten to death. We've heard arguments on both sides, over, and over again. How many times is this going to be rehashed? I don't want to even post anything in here, because it's just going to get overshadowed. I almost wish this thread would get locked so we can move on to something else....

 

Everybody can always decide when they want to stop participating in it. Don't have to have a thread locked to stop posting in it, just click unsubscribe.