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Let's say you invested in Tesla for your pension and you see that the board give Must 3.5 years of company profits as bonus, nullifying any company profit for t

Let's say you invested in Tesla for your pension and you see that the board give Must 3.5 years of company profits as bonus, nullifying any company profit for that time: "Tesla ended Q4 2023 with a net income of $7.9 billion and the full year with $15 billion in profits" , that money is more 3 years of profit, meaning that the company , after that compensation, must wait almost 4 years, if the trend remains that one, to generate profit ! Are you happy in that case ? EV market is now more competitive, it's no more the time when Tesla was founded, Mercedes has a better autonomous guidance system, there are plenty of alternative EV brands, moving that kind of money int the pocket of one of the owners a good move or you are crippling the company because you are taking away money could be user for R&D, for example, killing the company in years ? Or you think they are slowly burning your savings. Maybe you are not a billionaire, that are all your saving. Let's go further, most lucrative automaker is Toyota, Tesla is 5 position under in that top 10. If I take the CEO of Toyota, giving him double salary, to manage Tesla, without 55 billion bonus, will the company be mismanaged ? I don't think so, Musk isn't the only "genius" able to run a carmaker company and, in fact, there are at least 6 guys are doing a better job. Obviously there is the marketing benefit of the Musk brand associated to Tesla, but, men, 55B$, is it worth ??? IMHO, he did need money for Twitter and used Tesla as his own wallet, ignoring correct management practices and acting not in best interest of the company , de facto crippling its grown. Plus, CEO also owning company big shares percentage, often reduce their salary and benefits because , you know, it's your best interest work to increase company value because that enrich yourself. So I really don't understand because someone think judge's sentence is unfair : again , I have shares in a company where the same happen, I also call my lawyer. Also, I expect that the judge deliberate to guarantee the rights of all shareholders, independently by the quote they own and in the best interest of the company existence and grown. Think the judge did, IMHO.

kortilla 3y ago
> Let's say you invested in Tesla for your pension and you see that the board give Must 3.5 years of company profits as bonus, nullifying any company profit for that time: That’s irrelevant and wrong. First, they don’t give profits, they were options grants for equity which dilutes shareholders. Second, profits aren’t divided amongst shareholders because they don’t pay dividends. Your pension got a 10x gain from this agreement if it was invested and voted for it. Now the agreement is being withdrawn but your pension will keep the 10x. If you can’t see how that can be seen as unfair, I don’t know what to tell you. Musk led the company through a moonshot goal and the argument is “eh, we said we would give you a huge bonus for doing this but you’re already invested”. It’s not meaningfully different from taking away a software engineer’s options because they have a bunch of vested stock because “they already have skin in the game”. The conflict of interest is the only thing with merit. The fairness arguments are complete bullshit and will set a terrible precedent on their own.
xcv123 3y ago
You misunderstand. Musk received equity (shares), not profit. Under his leadership the value of those shares reached $50B. Tesla's market cap grew from $40B in 2019 to $1.2 Trillion at its peak in 2021. Now it's at $600B today. That is the total value of all Tesla shares which is now 15 times more valuable than it was in 2019. https://companiesmarketcap.com/tesla/marketcap/ https://companiesmarketcap.com/tesla/marketcap/

kortilla 3y ago

> Let's say you invested in Tesla for your pension and you see that the board give Must 3.5 years of company profits as bonus, nullifying any company profit for that time: That’s irrelevant and wrong. First, they don’t give profits, they were options grants for equity which dilutes shareholders. Second, profits aren’t divided amongst shareholders because they don’t pay dividends. Your pension got a 10x gain from this agreement if it was invested and voted for it. Now the agreement is being withdrawn but your pension will keep the 10x. If you can’t see how that can be seen as unfair, I don’t know what to tell you. Musk led the company through a moonshot goal and the argument is “eh, we said we would give you a huge bonus for doing this but you’re already invested”. It’s not meaningfully different from taking away a software engineer’s options because they have a bunch of vested stock because “they already have skin in the game”. The conflict of interest is the only thing with merit. The fairness arguments are complete bullshit and will set a terrible precedent on their own.

xcv123 3y ago

You misunderstand. Musk received equity (shares), not profit. Under his leadership the value of those shares reached $50B. Tesla's market cap grew from $40B in 2019 to $1.2 Trillion at its peak in 2021. Now it's at $600B today. That is the total value of all Tesla shares which is now 15 times more valuable than it was in 2019. https://companiesmarketcap.com/tesla/marketcap/ https://companiesmarketcap.com/tesla/marketcap/