The same week they’re laying off 14,000 employees?
this post was submitted on 18 Apr 2024
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That's like $4 million per laid off employee that's going directly into Musk's pockets. Ridiculous.
Man.. And here I am waking up happy that my paycheck went through before the IRS withdrew what we owed.
That's what he is using as the cost saving to improve the profit margin and thus earn his bonus.
It's disgusting. $56 billion is enough to make someone the 18th richest person in America, and richer than some of the wealthiest whole families. 14,000 people have just had their jobs taken away through no fault of their own, the latest in what feels like a constant stream of large layoffs in multiple industries.
Look at how close Musk is to losing #1 in America - Musk is hemorrhaging money (mostly via Twitter) and others are catching up. If this is being driven by a narcissistic need to hold onto #1 it would make this ridiculous payout even more senseless.
Is there any information on how asset managers like vanguard/Blackrock will vote on this one with the proxy votes they have from index funds?
I can't really imagine a justification that would make paying Musk those $56B be in the interest of investors.
Also just curious, is there any kind of clause regarding conflict of interest? Or can Musk vote for himself with his shares?
From another article I read said ~70% approved the package in 2018 before it was ruled excessive by a judge. I don't see why that would change too much seeing as the stock is up by 600% since the vote. But Tesla loosing 40% of the value so far this year may make them think.
thanks, that's some useful context.
However in my mind the stock price going up 600% since the last vote, and thus Elon "deserving" those $56B actually should have no relevance today.
It would matter if it were a charity, but as owner of a capitalist corporation that line of thinking shouldn't matter. I'm sure there are plenty of people working at telsa that would "deserve" more pay, but they get as little as possible to keep them around. Why treat the CEO differently in that regard?
So the only 3 questions imo would be:
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Is Elon's future involvement from this point on worth just paying him these $56B ( - whatever you'd have to pay him under a new compensation package)? And i have a hard time seeing how he would add this amount of value, since we are talking about a sum larger than the market cap of Ford or GM. Also compared to 2018 Elons "brand value" has gone way way down.
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How much damage can making Elon upset do to the company? Actually a risk worth calculating imo. The rational person in me would like to think that as a shareholder himself Elon wouldn't do anything that lowers the stock price (especially since i think he used it as collateral for his twitter purchase), but with him i wouldn't rule anything out. That said, if we go down that line of thinking, then we need to assign him no value in question 1.
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How high are the chances that we spend a ton of money fighting to not pay $56B and then have to pay anyways, having wasted a lot of time, additional money and goodwil? Considering a judge just ruled it excessive, i'd take my chances on that one.
I have a quick read of the executive compensation in the latest filings and according to the independent board members who make up the compensation committee Tecoking of Tesla and CEO ( no seriously that is his title in the listing) has achieved all the Revenue and Adjusted EBITDA milestones for the 2018 package and should be awarded the 303 million shares at $23 a share.
He also does the executive bullshit thing of not drawing a regular salary from the company so his only pay is stocks.
I agree that there are other staff who are far more deserving of those stock options
Elon likely doesn't care too much about his Tesla stock, much of that was used in the Twitter purchase - and Twitter is going to die because the purchase saddled it with $13bn of debt, with the company being worth less than that now.
This is the best summary I could come up with:
Tesla is asking shareholders to approve a move to Texas and to re-approve a $55.8 billion pay package for CEO Elon Musk that was recently voided by a Delaware judge.
Musk's 2018 pay package was voided in a ruling by Delaware Court of Chancery Judge Kathaleen McCormick, who found that the deal was unfair to shareholders.
"Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value," the letter said.
McCormick determined that the proxy statement given to investors for the 2018 vote "inaccurately described key directors as independent and misleadingly omitted details about the process."
McCormick also wrote that Denholm had a "lackadaisical approach to her oversight obligations" and that she "derived the vast majority of her wealth from her compensation as a Tesla director."
The ruling in favor of lead plaintiff and Tesla shareholder Richard Tornetta rescinded Musk's pay package in order to "restore the parties to the position they occupied before the challenged transaction."
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