4 ms·

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 comp

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.
      - i67vw3 3y ago
        So what should have been the penalty? Kick Elon's brother from the board or a fine or when next package is announced then force tesla to follow certain legal guidelines.
        rpmisms 3y ago
        There was nothing wrong with the comp package itself, but forcing a re-vote with disclosure of any false information would be the most appropriate strategy. It's still unfair, because it was a gamble then and a sure thing now, but I suspect it would pass again. This is what fines are for, though, and they work even better with very profit-sensitive companies like Tesla.
      - aw1621107 3y ago
        > 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. Is a fine even possible as a remedy here under Delaware law? Tornetta didn't ask for it, there appears to be no discussion of a fine even as a possible remedy in the decision, and I'm not sure whether Delaware law allows for a fine in the first place. The closest thing is the discussion about the defendants failing to "identify any logically defensible delta between the unfair Grant and a fair one", so the court was basically left with leaving the grant intact or ordering recission, and it seems in that case the general bias is against the wrongdoer.
rpmisms 3y ago
> Why wouldn't the business friendly court side with shareholders? Because the majority of the shareholders thought this was a very fair pay package when it was passed (73% voted yes, IIRC). Produce massive value, you get massive rewards.
- gpm 3y ago
  And they did so after the board omitted and misrepresented material facts in their disclosure to the shareholders, making the vote worth approximately nothing (as the court correctly found).
  - rpmisms 3y ago
    But it doesn't materially matter if SolarCity was a bad investment, or board members went on vacations together. The shareholders got their money's worth, and then some. The damages should be punitive for any misrepresentations, which is how this case would typically be resolved. Instead, the judge made FSD jokes in the ruling. I will read the appeal with great interest.
    - gpm 3y ago
      The shareholders certainly did not get their money's worth. Yes, Tesla did well, but that's not what the shareholders purchased, what the shareholders purchased was Elon as CEO - something that by all evidence presented was available for free. Moreover they did so after being deceived by a board (unbeknownst to them) controlled by Elon. Elon tried to scam them out of his money, he failed. I wouldn't want to invest in a company in a state where this sort of scam would succeed.
      - rpmisms 3y ago
        The shareholders purchased Tesla stock at $18, and voted on Elon getting a ton of money if he made them a ton of money. That's the representation that matters here, and it turned out extremely accurate.

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.
    - i67vw3 3y ago
      So what should have been the penalty? Kick Elon's brother from the board or a fine or when next package is announced then force tesla to follow certain legal guidelines.
      - rpmisms 3y ago
        There was nothing wrong with the comp package itself, but forcing a re-vote with disclosure of any false information would be the most appropriate strategy. It's still unfair, because it was a gamble then and a sure thing now, but I suspect it would pass again. This is what fines are for, though, and they work even better with very profit-sensitive companies like Tesla.
    - aw1621107 3y ago
      > 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. Is a fine even possible as a remedy here under Delaware law? Tornetta didn't ask for it, there appears to be no discussion of a fine even as a possible remedy in the decision, and I'm not sure whether Delaware law allows for a fine in the first place. The closest thing is the discussion about the defendants failing to "identify any logically defensible delta between the unfair Grant and a fair one", so the court was basically left with leaving the grant intact or ordering recission, and it seems in that case the general bias is against the wrongdoer.

rpmisms 3y ago

> Why wouldn't the business friendly court side with shareholders? Because the majority of the shareholders thought this was a very fair pay package when it was passed (73% voted yes, IIRC). Produce massive value, you get massive rewards.

gpm 3y ago
And they did so after the board omitted and misrepresented material facts in their disclosure to the shareholders, making the vote worth approximately nothing (as the court correctly found).
- rpmisms 3y ago
  But it doesn't materially matter if SolarCity was a bad investment, or board members went on vacations together. The shareholders got their money's worth, and then some. The damages should be punitive for any misrepresentations, which is how this case would typically be resolved. Instead, the judge made FSD jokes in the ruling. I will read the appeal with great interest.
  - gpm 3y ago
    The shareholders certainly did not get their money's worth. Yes, Tesla did well, but that's not what the shareholders purchased, what the shareholders purchased was Elon as CEO - something that by all evidence presented was available for free. Moreover they did so after being deceived by a board (unbeknownst to them) controlled by Elon. Elon tried to scam them out of his money, he failed. I wouldn't want to invest in a company in a state where this sort of scam would succeed.
    - rpmisms 3y ago
      The shareholders purchased Tesla stock at $18, and voted on Elon getting a ton of money if he made them a ton of money. That's the representation that matters here, and it turned out extremely accurate.