3 ms·

If I had to guess, I would say the comment was downvoted because it is unnecessary adversarial, and ignores the obvious non-oppositional-defiant-disorder option

If I had to guess, I would say the comment was downvoted because it is unnecessary adversarial, and ignores the obvious non-oppositional-defiant-disorder option: elmu saying "you're right, I don't need that additional compensation to motivate me, my existing stock ownership will motivate me", and for him then to perform. If there's a risk that he wouldn't do the job because of an inability to focus given other responsibilities, a fiduciary would be obliged to remove him from his position. Money wouldn't gain his "focus", because then he would just get his friends at spacex to give him even more tens of billions of company money to "focus" even more. And we all know he'd just be shitposting on Twitter the whole time no matter what.

s1artibartfast 3y ago
>If I had to guess, I would say the comment was downvoted because it is unnecessary adversarial, and ignores the obvious non-oppositional-defiant-disorder option: elmu saying "you're right, I don't need that additional compensation to motivate me, my existing stock ownership will motivate me", and for him then to perform. I think there are obviously many options, but I highlighted that aspect because i think it is the most interesting the most interesting. It isnt contradicted by anything you said. Essentially, the question is how do you negotiate splitting the rewards of an continued ongoing venture, when both parties already benefit from success. You see this often in situations of co-ownership. Sometimes one start-up founder will stop working, knowing the other has incentive to make it work. Sometimes you see it in schools when there are group projects.
- ImPostingOnHN 3y ago
  > Essentially, the question is how do you negotiate splitting the rewards of an continued ongoing venture, when both parties already benefit from success. Close: it's not "both" parties, it's all shareholders, so way more than 2 people to pay. And the "how" is already decided: shareholder vote. And the rewards are already split amongst the shareholders, of which elmu is a large one. Theoretically, elmu might be able to get even more compensation than that, via shareholder vote. But the court said elmu can't lie to all the shareholders to get them to vote yes (which he was found guilty of having done, thus voiding the previous shareholder vote). For further discussion, I'd like to focus on the substantive points of the judgement. Some may have personal opinions on the matter, and the judge considered all those personal opinions, judged them, and came to the below conclusions: - elmu's stock ownership is enough to motivate him, even without a 50 billion dollar additional stock/option grant; - elmu improperly interfered in Tesla governance to exert undue influence on his own compensation at the expense of shareholders and the company; - elmu defrauded shareholders to personally enrich himself at the expense of them and the company. Are these arguable? Well, they were before the judgement, and were indeed argued about. Now that the case is over and the judgement rendered, they aren't. So, I'd like to hear your thoughts on these points now that they've officially and formally been confirmed true.
  - s1artibartfast 3y ago
    >And the "how" is already decided: shareholder vote. And the rewards are already split amongst the shareholders, of which elmu is a large one. Thats not how you negotiate, apply leverage, and determine a middle-ground. That's how you approve a negotiated deal. >For further discussion, I'd like to focus on the substantive points of the judgement. Some may have personal opinions on the matter, and the judge considered all those personal opinions, judged them, and came to the below conclusions: To be clear, I have zero interest in discussing the judges finding in the rest of the musk case (e.g. improper disclosure and lack if independence). That seems pretty straight forward to me. What I do find interesting, as stated multiple times above, is the comp negotiations & motivation aspect. >elmu's stock ownership is enough to motivate him, even without a 50 billion dollar additional stock/option grant This may be true, but don't think it is fully fleshed out logic. Elon would get his pre-deal portion of profit, with or without ongoing participation. It also ignores the damage Elon could do by leaving, which the company is also paying to avoid. It assumes that if Musk was denied comp, he would fall back to what you called a "non-oppositional-defiant-disorder option". The way I read the judgement, Musk would have a better case if he had been overtly oppositional, threatening, and held the board hostage, saying "pay me more or I will leave and we both suffer". It seems to bake in the idea that Beyond a certain point, money either has no marginal utility to Musk, or that musk has no more capacity to contribute. The first is wrong because otherwise musk wouldn't be pursuing a deal. The second seems to ignore the difference between vested and conditional equity. The judge partially addresses the second part by bringing up statements where Elon said he had no intention of leaving. However, it seems obvious that there was a presumption that there would be some sort of additional compensation. This case is one example, but I also want to know how this situation is handled in other instances, as it isn't that rare. There are probably econ papers on the topic. e.g. if you know your partner is really invested in your team school project, what stops you from checking out. Based on what I have seen in other companies, Boards often DO give officers that are already major shareholders more incentives, and dont just have them work to increase valuation of their pre-existing equity.
    - ImPostingOnHN 3y ago
      > Thats not how you negotiate, apply leverage, and determine a middle-ground. Neither is populating the compensation board with people rife with conflicts of interest (nor is lying about it to shareholders). That was one of the key findings here: the board, as a result of musk's actions, failed to properly negotiate in the best interest of shareholders. > This may be true, but don't think it is fully fleshed out logic. Elon would get his pre-deal portion of profit, with or without ongoing participation. It was found by the judge to be fully fleshed out logic. elmu would get no compensation without participation, because his wealth would decrease as a result of lack of participation, and increase as a result of his participation. That was judged to be enough motivation for him to participate. > It also ignores the damage Elon could do by leaving, which the company is also paying to avoid. It doesn't ignore that: it was directly addressed. As judged, that threat is empty, he was always going to stay anyways. Plus, he would lose billions in wealth via stock price decline if he bailed. Doubt it? The package was voided, and he's staying. Indeed, you pointed this out yourself: > The judge partially addresses the second part by bringing up statements where Elon said he had no intention of leaving. However, it seems obvious that there was a presumption that there would be some sort of additional compensation In the judge's judgement, there was no such presumption, and saying a presumption one makes up is "obvious" doesn't help the case for it being so. In any case, he was already going to achieve additional compensation via stock appreciation. To be absolutely clear: if you own a company, and you increase the value of the company, even if you take no paycheck, you have been compensated. The appreciation in value of your stocks is compensation. If the value increases ten billion in 1 year, you have been compensated ten billion that year for your efforts. Now, billions is a lot of compensation for 1 year, but if elmu wants more compensation than that, he has to honestly put together a compensation board that represents shareholders, honestly negotiate against it, honestly disclose all relevant info, and honestly hold a shareholder vote. He failed at all these, so now he has to start over (if he wants). >if you know your partner is really invested in your team school project, what stops you from checking out. The analogy here is, 'if you know musk is really invested in _his_personal_ school project, what stops _him_ from checking out?' Obviously the fact that he's really (and literally) [in]vested in his own personal project!

s1artibartfast 3y ago

>If I had to guess, I would say the comment was downvoted because it is unnecessary adversarial, and ignores the obvious non-oppositional-defiant-disorder option: elmu saying "you're right, I don't need that additional compensation to motivate me, my existing stock ownership will motivate me", and for him then to perform. I think there are obviously many options, but I highlighted that aspect because i think it is the most interesting the most interesting. It isnt contradicted by anything you said. Essentially, the question is how do you negotiate splitting the rewards of an continued ongoing venture, when both parties already benefit from success. You see this often in situations of co-ownership. Sometimes one start-up founder will stop working, knowing the other has incentive to make it work. Sometimes you see it in schools when there are group projects.

ImPostingOnHN 3y ago
> Essentially, the question is how do you negotiate splitting the rewards of an continued ongoing venture, when both parties already benefit from success. Close: it's not "both" parties, it's all shareholders, so way more than 2 people to pay. And the "how" is already decided: shareholder vote. And the rewards are already split amongst the shareholders, of which elmu is a large one. Theoretically, elmu might be able to get even more compensation than that, via shareholder vote. But the court said elmu can't lie to all the shareholders to get them to vote yes (which he was found guilty of having done, thus voiding the previous shareholder vote). For further discussion, I'd like to focus on the substantive points of the judgement. Some may have personal opinions on the matter, and the judge considered all those personal opinions, judged them, and came to the below conclusions: - elmu's stock ownership is enough to motivate him, even without a 50 billion dollar additional stock/option grant; - elmu improperly interfered in Tesla governance to exert undue influence on his own compensation at the expense of shareholders and the company; - elmu defrauded shareholders to personally enrich himself at the expense of them and the company. Are these arguable? Well, they were before the judgement, and were indeed argued about. Now that the case is over and the judgement rendered, they aren't. So, I'd like to hear your thoughts on these points now that they've officially and formally been confirmed true.
- s1artibartfast 3y ago
  >And the "how" is already decided: shareholder vote. And the rewards are already split amongst the shareholders, of which elmu is a large one. Thats not how you negotiate, apply leverage, and determine a middle-ground. That's how you approve a negotiated deal. >For further discussion, I'd like to focus on the substantive points of the judgement. Some may have personal opinions on the matter, and the judge considered all those personal opinions, judged them, and came to the below conclusions: To be clear, I have zero interest in discussing the judges finding in the rest of the musk case (e.g. improper disclosure and lack if independence). That seems pretty straight forward to me. What I do find interesting, as stated multiple times above, is the comp negotiations & motivation aspect. >elmu's stock ownership is enough to motivate him, even without a 50 billion dollar additional stock/option grant This may be true, but don't think it is fully fleshed out logic. Elon would get his pre-deal portion of profit, with or without ongoing participation. It also ignores the damage Elon could do by leaving, which the company is also paying to avoid. It assumes that if Musk was denied comp, he would fall back to what you called a "non-oppositional-defiant-disorder option". The way I read the judgement, Musk would have a better case if he had been overtly oppositional, threatening, and held the board hostage, saying "pay me more or I will leave and we both suffer". It seems to bake in the idea that Beyond a certain point, money either has no marginal utility to Musk, or that musk has no more capacity to contribute. The first is wrong because otherwise musk wouldn't be pursuing a deal. The second seems to ignore the difference between vested and conditional equity. The judge partially addresses the second part by bringing up statements where Elon said he had no intention of leaving. However, it seems obvious that there was a presumption that there would be some sort of additional compensation. This case is one example, but I also want to know how this situation is handled in other instances, as it isn't that rare. There are probably econ papers on the topic. e.g. if you know your partner is really invested in your team school project, what stops you from checking out. Based on what I have seen in other companies, Boards often DO give officers that are already major shareholders more incentives, and dont just have them work to increase valuation of their pre-existing equity.
  - ImPostingOnHN 3y ago
    > Thats not how you negotiate, apply leverage, and determine a middle-ground. Neither is populating the compensation board with people rife with conflicts of interest (nor is lying about it to shareholders). That was one of the key findings here: the board, as a result of musk's actions, failed to properly negotiate in the best interest of shareholders. > This may be true, but don't think it is fully fleshed out logic. Elon would get his pre-deal portion of profit, with or without ongoing participation. It was found by the judge to be fully fleshed out logic. elmu would get no compensation without participation, because his wealth would decrease as a result of lack of participation, and increase as a result of his participation. That was judged to be enough motivation for him to participate. > It also ignores the damage Elon could do by leaving, which the company is also paying to avoid. It doesn't ignore that: it was directly addressed. As judged, that threat is empty, he was always going to stay anyways. Plus, he would lose billions in wealth via stock price decline if he bailed. Doubt it? The package was voided, and he's staying. Indeed, you pointed this out yourself: > The judge partially addresses the second part by bringing up statements where Elon said he had no intention of leaving. However, it seems obvious that there was a presumption that there would be some sort of additional compensation In the judge's judgement, there was no such presumption, and saying a presumption one makes up is "obvious" doesn't help the case for it being so. In any case, he was already going to achieve additional compensation via stock appreciation. To be absolutely clear: if you own a company, and you increase the value of the company, even if you take no paycheck, you have been compensated. The appreciation in value of your stocks is compensation. If the value increases ten billion in 1 year, you have been compensated ten billion that year for your efforts. Now, billions is a lot of compensation for 1 year, but if elmu wants more compensation than that, he has to honestly put together a compensation board that represents shareholders, honestly negotiate against it, honestly disclose all relevant info, and honestly hold a shareholder vote. He failed at all these, so now he has to start over (if he wants). >if you know your partner is really invested in your team school project, what stops you from checking out. The analogy here is, 'if you know musk is really invested in _his_personal_ school project, what stops _him_ from checking out?' Obviously the fact that he's really (and literally) [in]vested in his own personal project!