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Elon Musk's multibillion-dollar Tesla pay package blocked by a judge again

15 points by breadwinner 2y ago

gsibble 2y ago
This will be the end of incorporating in Delaware if this ruling is allowed to stand.
- breadwinner 2y ago
  Not really. Elon Musk's case is outlandish. Who gets paid $101 billion pay package? Should the pay package of Tesla CEO be equal to the market caps of Ford and GM combined? It is crazy to suggest that. For comparison Tim Cook is paid around $63 million per year, and Satya Nadella is paid $79 million.
  - s1artibartfast 2y ago
    I think that should be between the shareholders and Musk.
    - breadwinner 2y ago
      Shareholders were not properly informed, so one of them sued.
      - s1artibartfast 2y ago
        yes, I understand that. I am speaking about this appeal that the article discusses. The shareholders voted that they wanted to give him the money anyways and the judge said they cant do that. >Musk’s attorneys attempted to reverse McCormick’s January decision after the 2018 pay package was re-approved by 84% of shares not held by Musk or his brother, Kimbal Musk, in June. But on Monday, that motion was denied. McCormick said that although the package was once again ratified by a majority of shareholders, that didn’t mean Musk’s record-breaking payday was in shareholders’ best interests.
        aw1621107 2y ago
        Somewhat tangential, but this bit caught my eye: > But on Monday, that motion was denied. McCormick said that although the package was once again ratified by a majority of shareholders, that didn’t mean Musk’s record-breaking payday was in shareholders’ best interests. I'm not sure this is a particularly great description of the decision on the part of the linked article since I don't think that part of the decision rested at all on whether the compensation package was "in shareholders' best interests. From the decision [0], > There are at least four fatal flaws [with the ratification argument]. First, the defendants have no procedural ground for flipping the outcome of an adverse post-trial decision based on evidence they created after trial. Second, common-law ratification is an affirmative defense that must be timely raised, which means that, at a minimum, it cannot be raised for the first time after the post-trial opinion. Third, what the defendants call “common law ratification” has no basis in the common law—a stockholder vote standing alone cannot ratify a conflicted-controller transaction. Fourth, even if a stockholder vote could have a ratifying effect, it could not do so here due to multiple, material misstatements in the proxy statement. Each of these defects standing alone defeats the motion to revise. [0]: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r_wXxfW2wy_M/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r_wXxfW2...
        croes 2y ago
        If he slaps every shareholder in the face and the majority agree, that doesn't mean the rest can't press charges for assault. Don't forget his threats to remove AI and robotics from Tesla if the don't give him what he wants. That's not a free decision.
        s1artibartfast 2y ago
        I agree that the legal issue appears to turn on limits of majority shareholder consent. I dont particularly agree with the free decision part. There is no such thing as a free decision, nor is it desirable. Quid pro quo is expected in contract law and the legal doctrine of consideration holds that a contract is not legally binding unless there is something of value exchanged between the parties.
  - hnburnsy 2y ago
    I think this will be quite the enticement for lawyers to sue companies incorporated in Delaware... >The judge additionally ruled on the award for the Tesla shareholder who brought the original suit, calling their request for $5.6 billion in legal fees “a bold ask” in a case about excessively high executive compensation. McCormick said the plaintiff, a Tesla shareholder named Richard Tornetta, was entitled to $345 million in either cash or Tesla shares
- bdjsiqoocwk 2y ago
  [dead]
- Zigurd 2y ago
  No. Most minority investors want fast efficient and informed court processes for disputes. There are already more permissive places to incorporate, like Nevada. But incorporating in Delaware confers a premium in valuation because less sketchy stuff goes on in Delaware.
menomatter 2y ago
Why is anything related to Elon is so divisive. He is certainly a manifestation of the Trump phenomenon. Please someone build a Adblock filter that blocks anything related to musk and trump. I’d pay for it

15 points by breadwinner 2y ago

gsibble 2y ago

This will be the end of incorporating in Delaware if this ruling is allowed to stand.

breadwinner 2y ago
Not really. Elon Musk's case is outlandish. Who gets paid $101 billion pay package? Should the pay package of Tesla CEO be equal to the market caps of Ford and GM combined? It is crazy to suggest that. For comparison Tim Cook is paid around $63 million per year, and Satya Nadella is paid $79 million.
- s1artibartfast 2y ago
  I think that should be between the shareholders and Musk.
  - breadwinner 2y ago
    Shareholders were not properly informed, so one of them sued.
    - s1artibartfast 2y ago
      yes, I understand that. I am speaking about this appeal that the article discusses. The shareholders voted that they wanted to give him the money anyways and the judge said they cant do that. >Musk’s attorneys attempted to reverse McCormick’s January decision after the 2018 pay package was re-approved by 84% of shares not held by Musk or his brother, Kimbal Musk, in June. But on Monday, that motion was denied. McCormick said that although the package was once again ratified by a majority of shareholders, that didn’t mean Musk’s record-breaking payday was in shareholders’ best interests.
      - aw1621107 2y ago
        Somewhat tangential, but this bit caught my eye: > But on Monday, that motion was denied. McCormick said that although the package was once again ratified by a majority of shareholders, that didn’t mean Musk’s record-breaking payday was in shareholders’ best interests. I'm not sure this is a particularly great description of the decision on the part of the linked article since I don't think that part of the decision rested at all on whether the compensation package was "in shareholders' best interests. From the decision [0], > There are at least four fatal flaws [with the ratification argument]. First, the defendants have no procedural ground for flipping the outcome of an adverse post-trial decision based on evidence they created after trial. Second, common-law ratification is an affirmative defense that must be timely raised, which means that, at a minimum, it cannot be raised for the first time after the post-trial opinion. Third, what the defendants call “common law ratification” has no basis in the common law—a stockholder vote standing alone cannot ratify a conflicted-controller transaction. Fourth, even if a stockholder vote could have a ratifying effect, it could not do so here due to multiple, material misstatements in the proxy statement. Each of these defects standing alone defeats the motion to revise. [0]: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r_wXxfW2wy_M/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r_wXxfW2...
      - croes 2y ago
        If he slaps every shareholder in the face and the majority agree, that doesn't mean the rest can't press charges for assault. Don't forget his threats to remove AI and robotics from Tesla if the don't give him what he wants. That's not a free decision.
        s1artibartfast 2y ago
        I agree that the legal issue appears to turn on limits of majority shareholder consent. I dont particularly agree with the free decision part. There is no such thing as a free decision, nor is it desirable. Quid pro quo is expected in contract law and the legal doctrine of consideration holds that a contract is not legally binding unless there is something of value exchanged between the parties.
- hnburnsy 2y ago
  I think this will be quite the enticement for lawyers to sue companies incorporated in Delaware... >The judge additionally ruled on the award for the Tesla shareholder who brought the original suit, calling their request for $5.6 billion in legal fees “a bold ask” in a case about excessively high executive compensation. McCormick said the plaintiff, a Tesla shareholder named Richard Tornetta, was entitled to $345 million in either cash or Tesla shares
bdjsiqoocwk 2y ago
[dead]
Zigurd 2y ago
No. Most minority investors want fast efficient and informed court processes for disputes. There are already more permissive places to incorporate, like Nevada. But incorporating in Delaware confers a premium in valuation because less sketchy stuff goes on in Delaware.

menomatter 2y ago

Why is anything related to Elon is so divisive. He is certainly a manifestation of the Trump phenomenon. Please someone build a Adblock filter that blocks anything related to musk and trump. I’d pay for it