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Yes, and this is a strange decision for the Chancery court to make, since they enjoy being business-friendly and having a reputation for such. I'm not going to

Yes, and this is a strange decision for the Chancery court to make, since they enjoy being business-friendly and having a reputation for such. I'm not going to say the judge is biased, but... Elon will likely take his own advice, and we'll probably see Texas offer incentives for companies to incorporate there in the near future.

numbsafari 3y ago
It’s only strange if you ignore everything except the name Elon Musk.
ibero 3y ago
How is it strange? I am unfamiliar with the chancery and precedent.
- rpmisms 3y ago
  The decision hinges on factors that aren't usually a big deal or thought much about. 1. The judge's opinion that the compensation package is "unfair", and 2. Elon's brother being on the board, which some shareholders may not have known about, despite it being very public information. This is apparently enough to overturn a rather old pay package. This reeks of a shareholder saying "Yeah right" at the time when it was voted on, and getting mad when Elon pulled off the seemingly impossible and skyrocketed Tesla's stock, meeting the lofty targets.
  - gpm 3y ago
    This is a gross misrepresentation of the ruling. Elon's brother being on the board was little more than a footnote because he wasn't involved in the relevant decision. I don't think the shareholders being aware of that or not was even a footnote. The part of the board that did participate in the relevant decisions (not including Elon or his brother) being beholden to Elon, while holding themselves out as independent, was a major factor.
    - rpmisms 3y ago
      It's a perfectly decent representation, if you're used to reading judgements (rulings are in motion practice, the outcome is a judgement) and understand how to read between the lines.
  - aw1621107 3y ago
    You're leaving out a lot of information. > The judge's opinion that the compensation package is "unfair" This leaves out a fair bit of reasoning as to why. Under Delaware law, Tesla/Musk bore the burden of proof to show that the compensation package was entirely fair - that is, both the process and the price were fair. She ruled that neither were fair, and so under Delaware law the compensation plan was improperly granted and a remedy must be chosen. > 2. Elon's brother being on the board, which some shareholders may not have known about, despite it being very public information. That is a pretty minor factor, and I'm curious why you picked this specific one out. Just having a personal relationship with the beneficiary of the compensation plan is not necessarily improper in and of itself, and the opinion states as much. The issue is that a majority of the board and the Compensation Committee were not independent from Musk both in principle and in practice, and this was not disclosed to shareholders before the vote. > This is apparently enough to overturn a rather old pay package. This reeks of a shareholder saying "Yeah right" at the time when it was voted on, and getting mad when Elon pulled off the seemingly impossible and skyrocketed Tesla's stock, meeting the lofty targets. The lawsuit was filed on 2018-06-05. The stockholder vote for the compensation plan was on 2018-03-21, less than 3 months before.
verdverm 3y ago
Isn't Texas the state where most patent trolls sue from? There's that one judge they have out there that is real favorable to the trolls iirc
- the_third_wave 3y ago
  Not "Texas" but "the Eastern District of Texas" specifically. Things supposedly have changed after a supreme court ruling limiting where such cases can be filed [1,2]. The top location for this type of lawsuit now seems to be Delaware. [1] https://www.dallasnews.com/business/technology/2017/05/22/supreme-court-ruling-threatens-to-shut-down-cottage-industry-for-small-east-texas-town/ https://www.dallasnews.com/business/technology/2017/05/22/su... [2] https://arstechnica.com/tech-policy/2017/10/patent-cases-in-east-texas-plunge-more-than-60-percent/ https://arstechnica.com/tech-policy/2017/10/patent-cases-in-...
maxerickson 3y ago
Why wouldn't the business friendly court side with shareholders? Like if I were an prospective investor that he cared about, I would tell Elon to move his company from Texas to Delaware before I gave him like a quarter.
- mc32 3y ago
  You want a court that applies the law and applies the law consistently in order to ensure some predictability for business. They should apply the law and not "prefer" one side to the other.
  - rpmisms 3y ago
    Exactly. This would have been a ~$10m judgement for the solarcity hijinks in a sane court.
    - ahahahahah 3y ago
      Wtf are you on? This case wasn't about solar city. And SolarCity was acquired 2 years before the pay package was in place anyway. Also, Tesla won the case about SolarCity. Is your objection that they shouldn't have? Because that seems surprisingly reasonable given your other comments.
      - rpmisms 3y ago
        Yeah, SolarCity was a... stinky acquisition that was mentioned in this case. Some of the relevant false statements related to it. Full disclosure, I agreed with Elon's current opinions before he had them, and I'm an avid legal nerd. I try to separate them as best I can, but when cases like this come up I can get a bit testy. I could word the same statements in an anti-Musk way, but this judgement is, to use a technical term, bullshit. My point is that this is a ridiculous penalty for the violations alleged, and simple punitive damages for misrepresented information would have been appropriate. A "slap on the wrist", as it were.
        3y ago

numbsafari 3y ago

It’s only strange if you ignore everything except the name Elon Musk.

ibero 3y ago

How is it strange? I am unfamiliar with the chancery and precedent.

rpmisms 3y ago
The decision hinges on factors that aren't usually a big deal or thought much about. 1. The judge's opinion that the compensation package is "unfair", and 2. Elon's brother being on the board, which some shareholders may not have known about, despite it being very public information. This is apparently enough to overturn a rather old pay package. This reeks of a shareholder saying "Yeah right" at the time when it was voted on, and getting mad when Elon pulled off the seemingly impossible and skyrocketed Tesla's stock, meeting the lofty targets.
- gpm 3y ago
  This is a gross misrepresentation of the ruling. Elon's brother being on the board was little more than a footnote because he wasn't involved in the relevant decision. I don't think the shareholders being aware of that or not was even a footnote. The part of the board that did participate in the relevant decisions (not including Elon or his brother) being beholden to Elon, while holding themselves out as independent, was a major factor.
  - rpmisms 3y ago
    It's a perfectly decent representation, if you're used to reading judgements (rulings are in motion practice, the outcome is a judgement) and understand how to read between the lines.
- aw1621107 3y ago
  You're leaving out a lot of information. > The judge's opinion that the compensation package is "unfair" This leaves out a fair bit of reasoning as to why. Under Delaware law, Tesla/Musk bore the burden of proof to show that the compensation package was entirely fair - that is, both the process and the price were fair. She ruled that neither were fair, and so under Delaware law the compensation plan was improperly granted and a remedy must be chosen. > 2. Elon's brother being on the board, which some shareholders may not have known about, despite it being very public information. That is a pretty minor factor, and I'm curious why you picked this specific one out. Just having a personal relationship with the beneficiary of the compensation plan is not necessarily improper in and of itself, and the opinion states as much. The issue is that a majority of the board and the Compensation Committee were not independent from Musk both in principle and in practice, and this was not disclosed to shareholders before the vote. > This is apparently enough to overturn a rather old pay package. This reeks of a shareholder saying "Yeah right" at the time when it was voted on, and getting mad when Elon pulled off the seemingly impossible and skyrocketed Tesla's stock, meeting the lofty targets. The lawsuit was filed on 2018-06-05. The stockholder vote for the compensation plan was on 2018-03-21, less than 3 months before.

verdverm 3y ago

Isn't Texas the state where most patent trolls sue from? There's that one judge they have out there that is real favorable to the trolls iirc

the_third_wave 3y ago
Not "Texas" but "the Eastern District of Texas" specifically. Things supposedly have changed after a supreme court ruling limiting where such cases can be filed [1,2]. The top location for this type of lawsuit now seems to be Delaware. [1] https://www.dallasnews.com/business/technology/2017/05/22/supreme-court-ruling-threatens-to-shut-down-cottage-industry-for-small-east-texas-town/ https://www.dallasnews.com/business/technology/2017/05/22/su... [2] https://arstechnica.com/tech-policy/2017/10/patent-cases-in-east-texas-plunge-more-than-60-percent/ https://arstechnica.com/tech-policy/2017/10/patent-cases-in-...

maxerickson 3y ago

Why wouldn't the business friendly court side with shareholders? Like if I were an prospective investor that he cared about, I would tell Elon to move his company from Texas to Delaware before I gave him like a quarter.

mc32 3y ago
You want a court that applies the law and applies the law consistently in order to ensure some predictability for business. They should apply the law and not "prefer" one side to the other.
- rpmisms 3y ago
  Exactly. This would have been a ~$10m judgement for the solarcity hijinks in a sane court.
  - ahahahahah 3y ago
    Wtf are you on? This case wasn't about solar city. And SolarCity was acquired 2 years before the pay package was in place anyway. Also, Tesla won the case about SolarCity. Is your objection that they shouldn't have? Because that seems surprisingly reasonable given your other comments.
    - rpmisms 3y ago
      Yeah, SolarCity was a... stinky acquisition that was mentioned in this case. Some of the relevant false statements related to it. Full disclosure, I agreed with Elon's current opinions before he had them, and I'm an avid legal nerd. I try to separate them as best I can, but when cases like this come up I can get a bit testy. I could word the same statements in an anti-Musk way, but this judgement is, to use a technical term, bullshit. My point is that this is a ridiculous penalty for the violations alleged, and simple punitive damages for misrepresented information would have been appropriate. A "slap on the wrist", as it were.
      - 3y ago