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Delaware throwing away its reputation as a reasonable, reliable, and above all predictable place for corporate law is an incredible own goal that more people sh

by User23 2y ago

Delaware throwing away its reputation as a reasonable, reliable, and above all predictable place for corporate law is an incredible own goal that more people should be talking about.

butter999 2y ago
Their reputation is being friendly to shareholders. Shareholders brought a suit alleging Musk's pay package was inappropriate. It came out in the lawsuit that the people charged with negotiating with Musk were actually taking direction from him. However you feel about that, I think it's easy to acknowledge that if the people negotiating on your behalf were being instructed by the counterparty, you probably didn't get the best deal you could. The court's decision was reasonable and probably would've been similar in any jurisdiction. This exodus appears to me to be part petty feud and part cargo cult.
- richwater 2y ago
  > Their reputation is being friendly to shareholders. And then the shareholders voted and it passed...?
  - JumpCrisscross 2y ago
    > then the shareholders voted and it passed...? Not the same shareholders. If the new vote had been on a new package, that would have been unambiguous. The bottom line is Musk and Mark don’t want Boards. That’s honestly fine if everyone agrees ex ante those are the rules they’re playing by. Delaware law requires independent Boards. Sort of like a quorum requirement, the company can’t do certain things if it’s deficient in this respect. Texas law apparently doesn’t.
- bradley13 2y ago
  Ad I understand it, after the initial ruling, the shareholders voted and passed the package again. The judge still disallowed it. She appears to be ruling based on ideology instead of law.
  - JumpCrisscross 2y ago
    Literally the comment below you.
  - dkjaudyeqooe 2y ago
    You're obviously a great legal scholar. Did you read the ruling? The "passed the package again" tried to resurrect the original incentive payments, retroactively. That was disallowed.
9283409232 2y ago
What's the own goal? All I know is that a judge vetoed Elon paying himself an absurd amount. Is that really what this is all about? Billionaire mad he didn't get more billions?
- adastra22 2y ago
  If you're on this site, surely you know the difference between a stock option and a stock grant? Elon's pay package was options, and was only evaluated at ~$2bn over many years in 2018, and even then assuming significant growth. At the time of grant, the options were worth $0. The only reason the pay package is so astronomical now is because the Tesla stock has risen astronomically in value. Which benefits the shareholders, no? This dilution in shareholder value is already factored into the rising price.
  - 9283409232 2y ago
    Going by this comment, it appears there was some sloppiness on Tesla's side of things and the judge is being a bit of a hard ass here. https://news.ycombinator.com/item?id=42901804 https://news.ycombinator.com/item?id=42901804
- JumpCrisscross 2y ago
  > a judge vetoed Elon paying himself an absurd amount Not technically correct. Tesla is allowed to gift Elon everything it owns. The problem was Tesla didn’t follow the rules in how to do it such that the shareholders were ensured an honest negotiation between themselves and management. The Board was not independent, and the shareholders at the time of the grant didn’t approve it. A later cohort signed off on it, but it was still backdated. The only downside to making a new grant are the tax implications.
- dkjaudyeqooe 2y ago
  The judge vetoed a pay packed designed by directors who were not independent of Musk. Musk was just sloppy and greedy. He could have got it if he had acted within the law, but then he probably wouldn't have gotten as much.
bouncing 2y ago
The same could be said of America in general. It’s totally unpredictable, and the people in charge are not especially reasonable.

by User23 2y ago

Delaware throwing away its reputation as a reasonable, reliable, and above all predictable place for corporate law is an incredible own goal that more people should be talking about.

butter999 2y ago

Their reputation is being friendly to shareholders. Shareholders brought a suit alleging Musk's pay package was inappropriate. It came out in the lawsuit that the people charged with negotiating with Musk were actually taking direction from him. However you feel about that, I think it's easy to acknowledge that if the people negotiating on your behalf were being instructed by the counterparty, you probably didn't get the best deal you could. The court's decision was reasonable and probably would've been similar in any jurisdiction. This exodus appears to me to be part petty feud and part cargo cult.

richwater 2y ago
> Their reputation is being friendly to shareholders. And then the shareholders voted and it passed...?
- JumpCrisscross 2y ago
  > then the shareholders voted and it passed...? Not the same shareholders. If the new vote had been on a new package, that would have been unambiguous. The bottom line is Musk and Mark don’t want Boards. That’s honestly fine if everyone agrees ex ante those are the rules they’re playing by. Delaware law requires independent Boards. Sort of like a quorum requirement, the company can’t do certain things if it’s deficient in this respect. Texas law apparently doesn’t.
bradley13 2y ago
Ad I understand it, after the initial ruling, the shareholders voted and passed the package again. The judge still disallowed it. She appears to be ruling based on ideology instead of law.
- JumpCrisscross 2y ago
  Literally the comment below you.
- dkjaudyeqooe 2y ago
  You're obviously a great legal scholar. Did you read the ruling? The "passed the package again" tried to resurrect the original incentive payments, retroactively. That was disallowed.

9283409232 2y ago

What's the own goal? All I know is that a judge vetoed Elon paying himself an absurd amount. Is that really what this is all about? Billionaire mad he didn't get more billions?

adastra22 2y ago
If you're on this site, surely you know the difference between a stock option and a stock grant? Elon's pay package was options, and was only evaluated at ~$2bn over many years in 2018, and even then assuming significant growth. At the time of grant, the options were worth $0. The only reason the pay package is so astronomical now is because the Tesla stock has risen astronomically in value. Which benefits the shareholders, no? This dilution in shareholder value is already factored into the rising price.
- 9283409232 2y ago
  Going by this comment, it appears there was some sloppiness on Tesla's side of things and the judge is being a bit of a hard ass here. https://news.ycombinator.com/item?id=42901804 https://news.ycombinator.com/item?id=42901804
JumpCrisscross 2y ago
> a judge vetoed Elon paying himself an absurd amount Not technically correct. Tesla is allowed to gift Elon everything it owns. The problem was Tesla didn’t follow the rules in how to do it such that the shareholders were ensured an honest negotiation between themselves and management. The Board was not independent, and the shareholders at the time of the grant didn’t approve it. A later cohort signed off on it, but it was still backdated. The only downside to making a new grant are the tax implications.
dkjaudyeqooe 2y ago
The judge vetoed a pay packed designed by directors who were not independent of Musk. Musk was just sloppy and greedy. He could have got it if he had acted within the law, but then he probably wouldn't have gotten as much.

bouncing 2y ago

The same could be said of America in general. It’s totally unpredictable, and the people in charge are not especially reasonable.