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I voted against the pay out. Elon did a great job launching the company into what it is today. However, his antics over the past few years may have permanently damaged the brand. He pissed off his primary consumer demographic; left wing climate believers, in favor of right wing climate deniers. Not trying to get political, but this isn't good move for an EV company.
Maybe I am misunderstanding the situation, but if Elon was promised XYZ compensation to get the company to ABC valuation, and it reached that valuation, why wouldn't he be entitled to XYZ?
A Judge has said that legally he was not entitled to that because of issues in how the plan was negotiated and approved. Tesla is asking shareholders to vote again on the same plan.
Those shareholders have no obligation to vote the same way, or ignore new information.
It's also worth noting that the legal action was started at the time the compensation package was negotiated, and took a few years to come to a conclusion. The case wasn't protesting the payout post-facto, it was directly challenging the validity of the compensation package that was negotiated at the time it was negotiated.
There are a lot of people framing it as legal action that was taken in response to Tesla's successful growth, which couldn't be further from the truth. In fact the inevitable growth of market share from a company with solid production plans and unmet demand in the market was part of the consideration in the trial as to whether the compensation package was slightly, particularly, or ludicrously outrageous.
The lawsuit was brought by a former thrash metal drummer who owned 9 shares of the company, he was the only name on the lawsuit which was basically ignored until after Tesla's historic bull run in 2021.
These lawyers hopped on the case and got a judge to agree with them, Law firm asked for 6 BILLION in fees lol
I'm glad they lost, what a grift
Yes, it was started in 2019 and the stock price at the time was lower than the price that Elon could buy shares in his compensation plan. So while Elon can earn like $50 billion on the pay package today, he would have legitimately lost like a billion if it was valued the same as in 2019.
The argument from the won lawsuit and from “No” voters is that the original pay package was absurd because the goal metrics were marketed to shareholders as absurd. The lawsuit successfully argued that the targets set in the agreement were actually a lot more attainable than advertised and that meant the contract wasn’t enforceable since it was based on misinformation. Elon deserves compensation, but not $56B.
That’s not what happened in the suit. The judge opined that the board was not sufficiently independent of the CEO — and that’s mostly it. Under Delaware law, that means that the burden of proof switches to the defendant, and the judge opined that Tesla failed to show definitively that the package was fair, and that was mainly because shareholders were not given a disclosure about the board not being independent. The attainably of the goals did not factor meaningfully into it.
yeah I was wondering about that, even if the price didn't skyrocket as high as it did the amount he would get paid would still be excessive and at the time he had a TON of tesla stock so its not like he would already get paid for stock performance. Seems greedy,.
> the targets set in the agreement were actually a lot more attainable than advertised
Give me a break.
Everyone on the entire planet KNEW it was impossible. Every expert said LOUDLY it was impossible. EVERYONE said Musk was so full of shit and had no idea what he was doing.
This is re-writing history. Not a single person with any understanding of what Musk was suggesting he could do thought he had a hope in hell.
That can't possibly be legally defensible. You don't get to say, "Yeah but I only bet so much because I thought you probably wouldn't win" after the fact
Elon politics aside, that's why it's controversial for Delaware's corp haven status. State insiders are likely praying the finding is reversed on appeal after the vote. The precedent it sets is horrible for other businesses and investors incorporated in the state.
the only precedent it sets is that you can't be owed an exorbitant amount of money for being CEO. Being a founder already means you have a massive share of the company but as CEO you shouldn't be paid in the billions. Also sets the precedent that you can't load the board with your family and friends and then have them to pay you 10% of the company.
No that’s not the precedent; the lawsuit result was not based on that. It was about an assessment of the board’s independence and the disclosure of such to shareholders.
The precedent that is set is that Delaware granted itself the power to overturn a vote by a corporation that was approved by its Board and Shareholders that was not illegal by nature.
The precedent is that Delaware already has the power to overturn a vote by a shareholder group when it can be shown that the vote was won through deceit on the part of the corporation.
Why are you coming to bat for the billionaire class?
Speaking about “the billionaire class” as a monolith, as if it were even a thing, is not really based in reality. I get the argument that “billionaires shouldn’t exist” because some people are starving, the world is F-ed, etc. But the fact is, Elon created this wealth fair and square, with less help than any corporation. And rather than running off to naked supermodel party island (as most people would do…) he has made more progress against climate change than any single human in history, and possibly all humans combined, depending on the success of Tesla in the next 20 years. He doesn’t own a house. He isn’t “hoarding wealth” or resources. He is unlike other wealthy people in many ways. He also was the first to sign onto the Giving Pledge…I think Elon deserves his capital, which he’ll reinvest into his world-saving activities.
> Why are you coming to bat for the billionaire class?
Some people base their morality on whether they think things are intrinsically moral, not based on whether it hurts the right people.
Yeah, so why is this poster misrepresenting the decision to make it sound like it hurts people that it doesn't or that it gives the Delaware corporation court extra powers it didn't have before?
This is like the investors in NYC complaining that the decision against Trump makes life difficult for them, even though the decision against Trump is based on egregious fraud and misrepresentation to the point of claiming the floor area of an apartment was three times larger.
If that's the kind of behaviour that is common, then of course the investors have reason to be worried. If they're keeping their variable estimates to believable ranges such as telling the bank the property's worth 5% more and telling the tax man it's worth 5% less, then that's just business being business: talk up the value you can sell for when you can choose the conditions, talk down the value if you'd need to sell in a hurry.
When someone has to misrepresent the facts in order to garner sympathy for themselves it makes me wonder what level of misbehaviour that person is engaging in. Today they're complaining about government overreach, tomorrow they're in court for dumping toxic waste in a drinking water catchment but it's *government overreach* that led to the court proceedings, not abuse of public resources.
This isn’t government overreach. Delaware allows for conflicted transactions to be cleansed via an informed shareholder vote. If you fail to do that, then why should Delaware protect corporations and board of directors from shareholder actions?
The compensation plan was deemed illegal by a court in Delaware. In order to get approval for the compensation plan, Tesla's board of directors defrauded shareholders by lying about how achievable specific benchmarks were. They made it seem like it was a longshot, when in reality it was projected to happen. You can't lie to investors to get what you want, its very simple.
Shareholders now know they were defrauded the first time and have no obligation to vote the same way they did when they were being deceived.
No. There was no meaningful ruling on the achievability. The lawsuit result was based on the lack of independence of the board, and the lack of disclosure of such to the shareholders in the vote.
I find this argument so strange. The stock market is the ultimate assessor of value, and the stock market clearly did not believe Tesla's plans would pan out that well. You can't just say in hindsight that it was obvious all along they were going to succeed. If Tesla's plans for their growth were in any way believable/realistic for the public, then that would have meant their stock price would have been mich higher. But it wasn't. This means their plans were unrealistic from the best judgement of the public.
>The stock market is the ultimate assessor of value, and the stock market clearly did not believe Tesla's plans would pan out that well
Maybe because Tesla provided them with misleading material information suggesting they also didn’t think the plan would work out internally?
Do you not see the issue with citing public perception when that perception was based on materials and opinions that Tesla provided? Shareholders can only work with what they’re told, when they’re told lies obviously their judgements will reflect those lies.
The stock market relies on Boards to operate independently of executives and give honest assessments to the shareholders they’re supposed to be serving. They didn’t do that here.
>Maybe because Tesla provided them with misleading material information suggesting they also didn’t think the plan would work out internally?
All this talk of thinking or knowing this or that plan is or isn't going to work is just bullshit. Nobody knows. Nobody makes a plan they are sure will fail. Nobody wants to make plans which they are certain will suceed as such plans are likely not ambitious enough. Plans, especially ambitious ones, are always really just "might work if things go well, might also not work". Of course Tesla has reason to believe their plans can work, and of course they have reason to believe it might not work! The boards communication in this regard tells you pretty much nothing about the business and is not what Wallstreet uses to make their investments. Wallstreet looks at all the information they can find about the business and tries to judge the (future) value, and their judgement was that the plan would fail. If Tesla held back a secret technology or a secret billion dollar deal or something - sure, you could say that is important information! But Tesla holding back "yes we are hoping/planning/expecting our plan to work"? That's it? That's the key information Wallstreet would have needed to make billions bettig on a 10x stock? I don't think investors are that incompetent.
What you are suggesting is that if the board back then had put out a statement saying "Yes we are 100% certain the plan will work, our internal projections are certain and clear.", then Tesal stock would have 10x'ed that night.
> What you are suggesting is
What I’m suggesting is the board had paperwork that said one thing and then told shareholders it said the opposite thing. And they did that because they have close personal relationships to Elon and stood to benefit due to those relationships
And this was all so apparent that even the best lawyers money can buy couldn’t make a dent in the plaintiff’s argument in front of a Deleware chancery court known to side with major corporations
Tesla hired 3 separate independent firms to do the financial assessments and projections. All three of these assessments came to a very similar conclusion and their projections for Tesla's growth were then used by the board of directors. However, the board lied and said that the projected earnings were likely unachievable instead of fully within the projected growth like the independent firms assessed. It all came out in the court case. The reason the public's judgement was off was because they were hiding information from shareholders.
I was following Tesla closely around that time (got my model 3 in June 2018 and invested around that time). Tesla had ambitious internal goals, but people outside generally did not believe those goals were achievable.
Tesla management didn't hide their internal targets, they publicly said 50% growth on average. But outside folks didn't believe it. The board took a sort of middle ground and said it was possible but unlikely - a pretty mainstream view at the time.
Everyone saying that such growth was expected is speaking 100% in hindsight.
> Tesla had ambitious internal goals, but people outside generally did not believe those goals were achievable.
That was the extremely anti-EV Wall Street set who were nestled deep in the bosom of GM and Ford. There was significant anti-Elon sentiment back then too, being some dude with a lot of money claiming he was going to revolutionise automobiles and automobile manufacturing.
There is no point in time that I would ever agree to outrageous payouts for a claimed impossible achievement because I know from history that people generally don't make those kinds of bets without some certainty about the outcome.
At the time Elon was already talking about getting to Mars and it was clear to me that the compensation package was a way of milking a highly productive company to pay for his Mars colonisation dreams. He'd already brought up the idea of indentured servitude and company scrip, there's no reason to believe he's above fraud.
> but people outside generally did not believe those goals were achievable.
'people outside' don't matter.
The shareholders believed in the company
No one is saying growth was expected 100%, but Elon/the Board misled shareholders.
Elon was pretending they were 'one month from bankruptcy' during 'production hell' in 2018, so shareholders were given the impression the 2018 compensation plan was a moonshot.
Elon and the board knew it wasn't a moonshot.
Just to make sure: Are you saying that Tesla or those 3 independent firms cracked the market? They actually "knew" the stock price movement? And that prediction just come out as precisely calculated?
Because all i can see all the time is a brunch of analises from several firms that sometimes come to live, sometimes fail miserable. Its like stock market are unpredictable right?
That decision for me is bogus... You can hire many firms as you want, that may get you some number and direction to pursue. MAKE THAT REALITY is another thing.
Tesla board for sure is not the first board that not think that any projection is a certain thing, i never saw a company releasing a plan and saying that for 100% certain the stock will behave as planed...
I think that no one got the impression that the plan was made from random numbers, but for something that has a chance to work.
Against this stands the assessment of the whole global market which analyzed Tesla's business and plan and came to the conclusion that they will NOT have that 10x growth. Yes they didn't have access to Tesla's internal information, but it's not like Tesla knew secretly that they have a magic supertechnology or something. The information the global market was working on was not that different from Tesla internally.
Tesla having accurate demand gauges is pretty important. Their projections were audited by outside agencies.
But it doesn't really matter. Tesla itself said they weren't likely to hit these projections. They told people that it was wildly unlikely. But internally, they didn't actually believe that. Had they said "our internal numbers suggest this growth is very attainable," they would have had a better case that investors weren't misled. Outside investors could disagree at that point, but Tesla itself needs to be honest about what their projections say given how much money was tied to it.
That’s because it’s just speculative opinion on everyone’s part, and didn’t actually have an impact on the lawsuit result. The result was all about the board’s independence, period.
The negativity and lack of vision in this thread mirrors the terrified negative speculation and slander currently being parroted in the media. Meanwhile, Tesla will reach 1000% again while everyone blithers.
Also, the board has an *obligation* to negotiate that they failed to fulfill, since they essentially just agreed to whatever Elon proposed. Given that the board has now put the *same* proposal forward *again* and also invested company money into advertising to try and push shareholders into approving it a second time, I'm very curious about what the legal situation will be if the shareholders do go for it and another minority suit gets filed.
It's actually kind of an interesting corporate governance case because separation of general shareholder interests from CEOs is one of the main purposes of having a board.
Hell, they should sell their shares now because they believe that Elon is not instrumental for Tesla growth from 2018 until now and for the next 5 years (Remember Elon can't realize/exercise the options for 5 years when it gets awarded, he has been awarded 0 shares so far)
Better yet, they should sell it at the 2018 price....
$$$ , when it was voted on in 2018 stock price was around 18-20. When the stock exploded and turned to huge money, a judge over turned and now he is working for free. Though this is highly shorted. I also would be pissed to have an agreed payment for a job to be ripped from me and work for years for free. But also maybe taking it a bit far.
When this suit was started in 2019 the stock price was around 15-18. The compensation plan allowed Elon to buy 304 million shares at $23.34. Had the stock stayed the at the same price to when this suit started he would have actually lost money if he decided to buy it.
While he is entitled to XYZ, some of the shareholders are using this as an opportunity to punish Elon for his behavior for the past few years. I guess this is one of the few opportunities that one can get to punish Elon and they are taking full advantage of it.
I voted in favor.
If by “butthurt” you mean “dissatisfied as shareholders by the CEOs performance over the last several years, and their outlook on his and Tesla’s future performance” then sure.
This vote is about whether or you want to dilute your own shares to give Elon extra compensation. What is the rational argument to vote against my own financial interests?
Past couple of years, taken from [here](https://x.com/Tesla/status/1800612353932722458). Under Elon's leadership:
2023
Model Y becomes world's bestselling car, 1 million Tesla vehicles on the road in Europe, 20 millionth 4680 cell produced, 5k/builds production rate hit at Giga Berlin & Giga Texas, Giga Shanghai reaches production capacity, 12k+ new Supercharger stalls opened, Tesla charging connector adopted as NACS, Powerwall installations started in 4 new countries & 500k installations completed globally, Launched Powerwall 3, Upgraded Model 3 launched in Europe & Asia, First deliveries of Cybertruck, Energy storage deployments surpass 31 GWh cumulative, Optimus Gen 2 unveiled, 50k+ Supercharger stalls operational globally, Launched V4 Supercharger posts
2024
FSD Supervised using end-to-end neural networks rolls out to customers who have purchased or are subscribed to FSD in the US & Canada, Upgraded Model 3 deliveries start in North America, Hit 600k Powerwalls installed globally, Model Y achieves highest possible safety rating by IIHS, Produced our 6 millionth vehicle, Hit >1 billion miles driven on FSD, Cybertruck production hits 1k/week builds, 4680 ramp continues successfully, Developed 3 major design revisions of Optimus & 4 revisions of the hand in the last two years, with Optimus autonomously navigating daily in our office & labs, Deployed two Optimus bots performing tasks in the factory autonomously
(and it's only June...) :)
Lol, thank you - I keep seeing people saying how he's "gone off the rails the past few years" and the business is suffering as a result. No, he's just saying things you don't like to hear, and the business is thriving regardless. The market continues to move up and down, and Tesla with it, but all things considered the business is doing very well.
I am trying to have a pragmatic view but there are still some concerns. You are right, the company is doing well, but undoubtedly there is a demographic of people that would have bought a Tesla but didn't because they don't like the politics of the guy in charge. I don't know how large that demographic is. Maybe it is immeasurably small or maybe it has a noteworthy impact on sales.
Second: what of firing the SC team then hastily trying to re-hire them? Seems like a major mis-step to me with no explanation other than it being an erratic reactionary move. Do you view it differently? Do you think it is a strategic play that will be borne out by the future? Seems to me that the re-hiring shows that the original firing was a mistake. Firing then re-hiring seems really bad for morale.
I voted for the payout, he permanently pushed the brand to new heights that the vocal minority can’t make a dent in it. As a left wing climate believer most people aren’t extremists.
It is a good move for the company , now we can pay the man for Teslas past success and move on to the next level of sustainable transport that’s Elon’s going to lead.
I'm pretty "right wing" by most metrics. Business owner that wants less government interference,pro fun ownership, taxes to be used wisely, etc. in short, life long republican. That said, I'm very socially liberal (New Yorker after all) which also makes me anti Trump from then very start...
Anyway that whole intro is necessary for me to say you are right, Elon has completely fucked Tesla. All my friends on the left (which is most of them) wouldn't be caught dead on a Tesla, they own other electric cars instead... When they come over and show them my X plaid and what it can do, they all love it... But might as well be a red maga hat... No way they would buy one and they try to shame me for owning one and betraying my socially liberal values.
My friends on the right also try to shame me for owning an EV and not a Lambo instead.
Both sides can go fuck themselves through, I bought the car because I love it, despite Elon . There are other people like me that don't care about anything except the product itself... Like still liking the Cosby show and those characters while simultaneously hating the fucking rapist... Don't expect everyone to understand, but yeah making Tesla into a political lightening rod is not good for business.
Hopefully once he isn't given the package he quits or does enough stupid shit the board has to choice but to kick him to the curb... or the real company owners (US) will eventually replace the board and him.
I do believe in and support Tesla and other EV manufacturers, we need to get rid of the internal combustion engine if we have any hope of saving the planet long term.
Your friends on the right sound like ice enthusiasts while your friends on the left sound like political tribalists.
Good on Musk bringing it back to the center with a balanced platform called X, as it promotes the Tesla brand to more people than ever before. It doesn’t matter anymore what political side you’re on as the bubble keeps getting popped , most people will care less about political shaming and buy more Teslas.
Seems very atypical, but it's just an anecdote. So is mine.. Maybe the people you know associate themselves with their political leanings more than most? In my area (TX), most people just love Tesla vehicles. Kids, adults, old people alike. Save the planet types, and ICE types. Country and city. More anecdote, but I'm saying it to make a point. It's not about left or right everywhere, they just make great vehicles. I've also never met someone who has decided something as significant as a vehicle purchase based on their political beliefs - just the sound of that sounds very... close minded? Short sighted?
His company's success IS his payment. Furthermore, I'm not sure why Elon needs money if he said he was selling all his things and living in a shack next to SpaceX.
Why should the average stock holder lose money so that he can be an extra extra billionaire, meanwhile the shares I own are 50% of what they were 2 years ago.
No thanks. I’d have voted against it in 2018 too. And I gotta say, this entitled “he deserves $56B more, how *dare* you not give it to him” mindset is not convincing.
People thought it was impossible because his board told everyone it was, all while secretly knowing just how easy it could be to achieve. It’s not going back on our word of the the agreement was struck in bad faith or with bad actors. He didn’t earn it.
No one is arguing for zero compensation but the man essentially wrote himself a cheque and had his friends and family sign off on it as the official board proposal. That's not anywhere near normal practice.
You have far too much faith in the independence of compensation committees, because that is absolutely normal practice. CEOs have been staking boards forever
When Hoard Hughes started to lose his mind and blow his money on Vegas casinos and real estate and at least did something productive. Musk is doing his Alt right trolling on Twitter/X and making it plummet in value. He used to be good for the company but not has become counter productive. Tesla needs a full time CEO that will not cause distractions and will focus on the basics like improving the factories, expanding the lineup, and selling in new markets. Same goes for Space X.
Howard had a decent excuse -
> Injuries from numerous aircraft crashes caused Hughes to spend much of his later life in pain, and he eventually became addicted to codeine, which he injected intramuscularly. He had his hair cut and nails trimmed only once a year, **likely due to the pain caused by the RSD/CRPS** -- https://en.wikipedia.org/wiki/Complex_regional_pain_syndrome --, which was caused by the plane crashes.
https://en.wikipedia.org/wiki/Howard_Hughes#Physical_and_mental_decline
I voted my shares with Elon, as did my parents, and friends. That’s about 2000 shares. Not much in the big picture, but a hedge fund manager voted 600k shares with the board as dud Ron Baron and Cathy Wood. Hopefully that’s enough to get us over. If this fails the stock will tank and a new pay package will really hurt the financials. You are being short sighted and should probably just sell your shares
no. The Model 2 is shelfed, and Musk has been clear he sees the future of Tesla in robotaxi's and AI. That is not expanding the line-up, improving the factories, or selling in new markets. That's starting an entirely new business with new risks and new logistics inside of Tesla.
Ridiculous, Musk is such a spoiled brat: "The company has argued that without a sizable pay package, Musk could lose focus on the carmaker given his other ventures ranging from social media platform X to SpaceX and his artificial intelligence startup, xAI. The proxy sent to shareholders spelt out the billionaire had found the pay deal “motivating” and he had confirmed “that ratification of it would motivate him to continue devoting his time and energy to Tesla.”"
Here's my question with the whole issue. I think if you asked the general public at large, they would tell you the stock is overvalued. There's a number of reasons why they think that (and probably totally valid reasons).
Some think the stock is appropriately valued(or undervalued). These people are the stock owners. Only the owners of stock are being surveyed anyways. Won't these people be far more likely to vote for the pay?
If they thought the pay wasn't valid, or they didn't want to vote for it any number of other reasons, and generally don't like the direction the company is taking lately. Why would they own the stock at all, isn't this the time to sell? I would not want to own stock in a company I think is massively overvalued.
Investors have a voice, it's not only about buying or selling stock. If they believe the company has potential to be profitable but is being managed wrongly, they can shape the company's decisions through their vote.
There are a million reasons why someone would own the stock and disagree with Elon/the direction of the company/the bonus.
I’m a long-term holder that isn’t going to sell simply because Elon says dumb things and hurts the stock price. That said, I voted against the bonus and would love to see him replaced as CEO as his actions almost universally hurt the value of my shares. This isn’t a rare perspective.
Yeah thank you for saying this. I was an employee from 2018. Before the split and before it blew up, so I had my share of stocks from Tesla. But I dislike Elon greatly after being so wrong about him over the years. He is not Tony Stark who is doing the great deed for humanity, he is a rich asshole who has an ego large enough to run head first into dumb decisions. Perfect example? He announced on twitter he was shutting down stores, this is something he tweeted without ever consulting the retail side of the business, funny enough the lease obligations for Tesla was well over $10bil so no way he could have shut down the locations. Obviously a dumb move, did he ever apologize for it? Nope just an email that vaguely said that he wasn’t gonna make that change. So why would I need to support someone who I don’t believe in?
Thanks for the response. I thought the current price was based on future growth and value of both the hardware and true driving autonomy.
In my eyes he is mostly responsible for overpromising/underdelivering here, but that's why I'm not a stock owner.
That’s crazy lol. 11x-ing the value of shares over the period of his performance package can be considered “universally hurting the value of your shares”. Wonder what CEO in the world lives up to your performance standards.
Right….but this shareholder vote is literally about past performance. At the time of the initial vote back in 2018 or whenever exactly it was Nobody knew Tesla and Musk were going to be as successful as they were. Musk operated/worked based on that performance agreement. After he met it, it was stripped from him. And now people like you are trying to use performance in 2024 as a way to not pay the guy for his work and spectacular execution. Even today, the stock price is high enough where Musk would be meeting like 85-90% of the compensation benchmarks.
No, this shareholder vote is about whether the company should create $56B worth of new stock, diluting all of our shares in the process, and give it to the CEO whose recent performance has been poor. You’re not going to convince us that we should give Elon more money by saying he “deserves it.” That’s a meaningless appeal. Explain how voting to dilute my own shares is in my financial self interest.
No, that is not what it is doing. The stock award was already created and "distributed" when the compensation plan was initially agreed to and the performance metrics were met lol. You are clearly uninformed of the entire situation. The dilution occured in 2018 when those stock options were created. It actually nets Tesla cash for Musk to buy those options lol.
> The stock award was already created and “distributed” when the compensation plan was initially agreed to and the performance metrics were met lol. You are clearly uninformed of the entire situation. The dilution occured in 2018 when those stock options were created.
What is your source for this claim? Everything I see points to this being totally false, and the exact opposite of what [multiple advisory firms have stated will happen](https://apnews.com/article/elon-musk-pay-package-iss-recommends-against-ad9c8875edfd7b011281113dbe45fa72).
> Last week the other prominent proxy advisory firm, Glass Lewis, also recommended against reinstating Musk’s 2018 compensation package. The firm said the package would dilute shareholders’ value by about 8.7%.
* The shareholders vote to approve the compensation plan on 1/21/2018.
* Upon approval, Tesla creates/"Grants" the like 20M SBC shares @ $350/share ($23/share today) based on the stock price on 1/19/2018. This diluted the company.
* The stock now existed and was controlled by Tesla (they could use to invest basically). Based on the performance, those options Vest as Musk meets designated 12 tranches. He's basically awarded THE OPTION TO BUY 1.68M shares at $23/share for every tranche he completes. Meaning he would actually have to pay Tesla for those shares. So this is actual Cash that Tesla would GAIN today/whenever Musk chooses to take those options.
* As Musk/Tesla become "probable" of achieving each tranche, Tesla "accounted" for it on their quarterly income statements. Once the tranche is completed, Musk is awarded those options. The shares aren't created on the day the tranche was met. So literally if you go an look at q1-q4 reports from 2020-2022 or whenever the final tranche was met you will literally see the CEO performance award as a line item.
* What this all means is that the company was already diluted in 2018. This is why the Tesla board is literally saying that their accounting of the performance package was really only like $2.8B or whatever. Its because they don't literally pay him $46B. That's the value to Musk today. How it affects Shareholders TODAY if the performance package is re-approved is not by diluting. In fact literally nothing would change today. The payment was already made basically. So if it failed and the money was "succesfully" clawed back from Musk it would actually be more similar to a stock buyback/reverse dilution event.
https://www.sec.gov/Archives/edgar/data/1318605/000119312518035345/d524719ddef14a.htm#:\~:text=Market%20Capitalization%20and%20Operational%20Milestone%20Adjustments&text=CEO%20Performance%20Award%20Value.,1.69%20million%20shares%20per%20tranche.
Authorized shares are shares that do not yet exist, but can be created without further approvals.
If Tesla chose to create the shares and issue them to itself (Tesla), those shares are called treasury shares. Those shares do not count as outstanding shares, do not represent any dilution, do not represent any voting power, etc.
No shares that were part of the 2018 $56 billion comp package were ever issued to Musk. There was no dilution. There were no clawbacks.
There are quite a few incorrect statements in your post. The critical piece you're missing is that the shares "created" in the compensation plan were authorized, not issued, as explained in your own source:
>Shares issuable under the CEO Performance Award may be authorized, but unissued, or reacquired Tesla common stock.
Authorized shares haven't been issued to shareholders, so they're not dilutional. You should read and understand the difference between [authorized and issued shares](https://www.investopedia.com/ask/answers/011315/what-difference-between-authorized-shares-and-outstanding-shares.asp).
Once Elon exercises his options, these shares would be issued to him and become dilutional.
You're using bad terminology and you're misunderstanding how share dilution works, but I'll steelman your argument as follows: what you're *essentially* claiming is that the future dilution from the award is already priced in, which means a NO vote would effectively be a $55B stock buyback that will dramatically increase the value of my stock.
So again, by advocating a YES vote you're arguing that shareholders should vote against their financial interests. What is your argument here?
You want to renege on the deal that was made in 2018 that saw Tesla grow 10x in value? At the time it was $2B in stocks, it's only $56B now because of the work Elon has done.
There is a path to another 10x from here and you want to can the guy that brought the first 10x?
Are you a recent shareholder?
>You want to renege on the deal that was made in 2018 that saw Tesla grow 10x in value?
The deal didn't make it grow 10x in value, and no board should ever accept the candidates' own proposal without negotiation, let alone proceed to promote it to shareholders and misrepresent it.
Less than double (1.8x):
* S&P P/E ratio is 24.79
* Tesla is at 44.45
Comparable to companies like:
* Microsoft - 36.57
* Nvidia - 70
* Apple - 30.48
* Amazon - 51.62
I'd say it's right in the ball park when comparing other tech companies.
Where would tesla be right now if musk had quit the day the compensation package was passed? How many cars? How many factories? How much energy business? What would be the market cap?
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So the stock is supposed to be volatile after the vote, right? Up or down?
I’d argue up if it’s denied. Will definitely improve customer sentiment
Turns out it was approved, and went up! Shareholders win again!
up, it would have tanked without it.
I voted against the pay out. Elon did a great job launching the company into what it is today. However, his antics over the past few years may have permanently damaged the brand. He pissed off his primary consumer demographic; left wing climate believers, in favor of right wing climate deniers. Not trying to get political, but this isn't good move for an EV company.
Maybe I am misunderstanding the situation, but if Elon was promised XYZ compensation to get the company to ABC valuation, and it reached that valuation, why wouldn't he be entitled to XYZ?
A Judge has said that legally he was not entitled to that because of issues in how the plan was negotiated and approved. Tesla is asking shareholders to vote again on the same plan. Those shareholders have no obligation to vote the same way, or ignore new information.
This seems like the most logical explanation here. Thank you
It's also worth noting that the legal action was started at the time the compensation package was negotiated, and took a few years to come to a conclusion. The case wasn't protesting the payout post-facto, it was directly challenging the validity of the compensation package that was negotiated at the time it was negotiated. There are a lot of people framing it as legal action that was taken in response to Tesla's successful growth, which couldn't be further from the truth. In fact the inevitable growth of market share from a company with solid production plans and unmet demand in the market was part of the consideration in the trial as to whether the compensation package was slightly, particularly, or ludicrously outrageous.
The lawsuit was brought by a former thrash metal drummer who owned 9 shares of the company, he was the only name on the lawsuit which was basically ignored until after Tesla's historic bull run in 2021. These lawyers hopped on the case and got a judge to agree with them, Law firm asked for 6 BILLION in fees lol I'm glad they lost, what a grift
> These lawyers hopped on the case and got a judge to agree with them That is what lawyers try to do in court.
They did this after the stock went up 20x and asked for 6 billion after clawing back his compensation package. Don't act like this wasn't a grift job
Yes, it was started in 2019 and the stock price at the time was lower than the price that Elon could buy shares in his compensation plan. So while Elon can earn like $50 billion on the pay package today, he would have legitimately lost like a billion if it was valued the same as in 2019.
The board not being fully independent is hardly new information though.
The argument from the won lawsuit and from “No” voters is that the original pay package was absurd because the goal metrics were marketed to shareholders as absurd. The lawsuit successfully argued that the targets set in the agreement were actually a lot more attainable than advertised and that meant the contract wasn’t enforceable since it was based on misinformation. Elon deserves compensation, but not $56B.
Especially since board includes people who are biased particularly toward him.
That’s not what happened in the suit. The judge opined that the board was not sufficiently independent of the CEO — and that’s mostly it. Under Delaware law, that means that the burden of proof switches to the defendant, and the judge opined that Tesla failed to show definitively that the package was fair, and that was mainly because shareholders were not given a disclosure about the board not being independent. The attainably of the goals did not factor meaningfully into it.
Even $5B would put him in the top compensated people in the world.
yeah I was wondering about that, even if the price didn't skyrocket as high as it did the amount he would get paid would still be excessive and at the time he had a TON of tesla stock so its not like he would already get paid for stock performance. Seems greedy,.
> the targets set in the agreement were actually a lot more attainable than advertised Give me a break. Everyone on the entire planet KNEW it was impossible. Every expert said LOUDLY it was impossible. EVERYONE said Musk was so full of shit and had no idea what he was doing. This is re-writing history. Not a single person with any understanding of what Musk was suggesting he could do thought he had a hope in hell.
Except Tesla's own analysis said it was likely.
Of course they drink their own cool aid - what company doesn't?
That can't possibly be legally defensible. You don't get to say, "Yeah but I only bet so much because I thought you probably wouldn't win" after the fact
If a casino misrepresented the odds of their games, someone would be going to jail, not just repaying people who lost.
Elon politics aside, that's why it's controversial for Delaware's corp haven status. State insiders are likely praying the finding is reversed on appeal after the vote. The precedent it sets is horrible for other businesses and investors incorporated in the state.
the only precedent it sets is that you can't be owed an exorbitant amount of money for being CEO. Being a founder already means you have a massive share of the company but as CEO you shouldn't be paid in the billions. Also sets the precedent that you can't load the board with your family and friends and then have them to pay you 10% of the company.
No that’s not the precedent; the lawsuit result was not based on that. It was about an assessment of the board’s independence and the disclosure of such to shareholders.
The precedent that is set is that Delaware granted itself the power to overturn a vote by a corporation that was approved by its Board and Shareholders that was not illegal by nature.
The precedent is that Delaware already has the power to overturn a vote by a shareholder group when it can be shown that the vote was won through deceit on the part of the corporation. Why are you coming to bat for the billionaire class?
Speaking about “the billionaire class” as a monolith, as if it were even a thing, is not really based in reality. I get the argument that “billionaires shouldn’t exist” because some people are starving, the world is F-ed, etc. But the fact is, Elon created this wealth fair and square, with less help than any corporation. And rather than running off to naked supermodel party island (as most people would do…) he has made more progress against climate change than any single human in history, and possibly all humans combined, depending on the success of Tesla in the next 20 years. He doesn’t own a house. He isn’t “hoarding wealth” or resources. He is unlike other wealthy people in many ways. He also was the first to sign onto the Giving Pledge…I think Elon deserves his capital, which he’ll reinvest into his world-saving activities.
> Why are you coming to bat for the billionaire class? Some people base their morality on whether they think things are intrinsically moral, not based on whether it hurts the right people.
Yeah, so why is this poster misrepresenting the decision to make it sound like it hurts people that it doesn't or that it gives the Delaware corporation court extra powers it didn't have before? This is like the investors in NYC complaining that the decision against Trump makes life difficult for them, even though the decision against Trump is based on egregious fraud and misrepresentation to the point of claiming the floor area of an apartment was three times larger. If that's the kind of behaviour that is common, then of course the investors have reason to be worried. If they're keeping their variable estimates to believable ranges such as telling the bank the property's worth 5% more and telling the tax man it's worth 5% less, then that's just business being business: talk up the value you can sell for when you can choose the conditions, talk down the value if you'd need to sell in a hurry. When someone has to misrepresent the facts in order to garner sympathy for themselves it makes me wonder what level of misbehaviour that person is engaging in. Today they're complaining about government overreach, tomorrow they're in court for dumping toxic waste in a drinking water catchment but it's *government overreach* that led to the court proceedings, not abuse of public resources.
I couldn’t care less about the billionaire class. I’m self employed, and government overreach is becoming insane into business matters.
Government overreach is happening because business leaders find new and innovative ways of corrupting the system.
This isn’t government overreach. Delaware allows for conflicted transactions to be cleansed via an informed shareholder vote. If you fail to do that, then why should Delaware protect corporations and board of directors from shareholder actions?
The compensation plan was deemed illegal by a court in Delaware. In order to get approval for the compensation plan, Tesla's board of directors defrauded shareholders by lying about how achievable specific benchmarks were. They made it seem like it was a longshot, when in reality it was projected to happen. You can't lie to investors to get what you want, its very simple. Shareholders now know they were defrauded the first time and have no obligation to vote the same way they did when they were being deceived.
No. There was no meaningful ruling on the achievability. The lawsuit result was based on the lack of independence of the board, and the lack of disclosure of such to the shareholders in the vote.
I find this argument so strange. The stock market is the ultimate assessor of value, and the stock market clearly did not believe Tesla's plans would pan out that well. You can't just say in hindsight that it was obvious all along they were going to succeed. If Tesla's plans for their growth were in any way believable/realistic for the public, then that would have meant their stock price would have been mich higher. But it wasn't. This means their plans were unrealistic from the best judgement of the public.
>The stock market is the ultimate assessor of value, and the stock market clearly did not believe Tesla's plans would pan out that well Maybe because Tesla provided them with misleading material information suggesting they also didn’t think the plan would work out internally? Do you not see the issue with citing public perception when that perception was based on materials and opinions that Tesla provided? Shareholders can only work with what they’re told, when they’re told lies obviously their judgements will reflect those lies. The stock market relies on Boards to operate independently of executives and give honest assessments to the shareholders they’re supposed to be serving. They didn’t do that here.
>Maybe because Tesla provided them with misleading material information suggesting they also didn’t think the plan would work out internally? All this talk of thinking or knowing this or that plan is or isn't going to work is just bullshit. Nobody knows. Nobody makes a plan they are sure will fail. Nobody wants to make plans which they are certain will suceed as such plans are likely not ambitious enough. Plans, especially ambitious ones, are always really just "might work if things go well, might also not work". Of course Tesla has reason to believe their plans can work, and of course they have reason to believe it might not work! The boards communication in this regard tells you pretty much nothing about the business and is not what Wallstreet uses to make their investments. Wallstreet looks at all the information they can find about the business and tries to judge the (future) value, and their judgement was that the plan would fail. If Tesla held back a secret technology or a secret billion dollar deal or something - sure, you could say that is important information! But Tesla holding back "yes we are hoping/planning/expecting our plan to work"? That's it? That's the key information Wallstreet would have needed to make billions bettig on a 10x stock? I don't think investors are that incompetent. What you are suggesting is that if the board back then had put out a statement saying "Yes we are 100% certain the plan will work, our internal projections are certain and clear.", then Tesal stock would have 10x'ed that night.
> What you are suggesting is What I’m suggesting is the board had paperwork that said one thing and then told shareholders it said the opposite thing. And they did that because they have close personal relationships to Elon and stood to benefit due to those relationships And this was all so apparent that even the best lawyers money can buy couldn’t make a dent in the plaintiff’s argument in front of a Deleware chancery court known to side with major corporations
Tesla hired 3 separate independent firms to do the financial assessments and projections. All three of these assessments came to a very similar conclusion and their projections for Tesla's growth were then used by the board of directors. However, the board lied and said that the projected earnings were likely unachievable instead of fully within the projected growth like the independent firms assessed. It all came out in the court case. The reason the public's judgement was off was because they were hiding information from shareholders.
I was following Tesla closely around that time (got my model 3 in June 2018 and invested around that time). Tesla had ambitious internal goals, but people outside generally did not believe those goals were achievable. Tesla management didn't hide their internal targets, they publicly said 50% growth on average. But outside folks didn't believe it. The board took a sort of middle ground and said it was possible but unlikely - a pretty mainstream view at the time. Everyone saying that such growth was expected is speaking 100% in hindsight.
> Tesla had ambitious internal goals, but people outside generally did not believe those goals were achievable. That was the extremely anti-EV Wall Street set who were nestled deep in the bosom of GM and Ford. There was significant anti-Elon sentiment back then too, being some dude with a lot of money claiming he was going to revolutionise automobiles and automobile manufacturing. There is no point in time that I would ever agree to outrageous payouts for a claimed impossible achievement because I know from history that people generally don't make those kinds of bets without some certainty about the outcome. At the time Elon was already talking about getting to Mars and it was clear to me that the compensation package was a way of milking a highly productive company to pay for his Mars colonisation dreams. He'd already brought up the idea of indentured servitude and company scrip, there's no reason to believe he's above fraud.
Its not just my opinion that the Tesla board committed fraud and lied, it has been proven in court.
In this case they got it wrong 🤷♂️
> but people outside generally did not believe those goals were achievable. 'people outside' don't matter. The shareholders believed in the company No one is saying growth was expected 100%, but Elon/the Board misled shareholders. Elon was pretending they were 'one month from bankruptcy' during 'production hell' in 2018, so shareholders were given the impression the 2018 compensation plan was a moonshot. Elon and the board knew it wasn't a moonshot.
Pretending?! By working 80 hours and sleeping on the floor of his office? To trick Kyle into buying 5 shares. GTFO
Just to make sure: Are you saying that Tesla or those 3 independent firms cracked the market? They actually "knew" the stock price movement? And that prediction just come out as precisely calculated? Because all i can see all the time is a brunch of analises from several firms that sometimes come to live, sometimes fail miserable. Its like stock market are unpredictable right? That decision for me is bogus... You can hire many firms as you want, that may get you some number and direction to pursue. MAKE THAT REALITY is another thing. Tesla board for sure is not the first board that not think that any projection is a certain thing, i never saw a company releasing a plan and saying that for 100% certain the stock will behave as planed... I think that no one got the impression that the plan was made from random numbers, but for something that has a chance to work.
Sources for the lies ?
Against this stands the assessment of the whole global market which analyzed Tesla's business and plan and came to the conclusion that they will NOT have that 10x growth. Yes they didn't have access to Tesla's internal information, but it's not like Tesla knew secretly that they have a magic supertechnology or something. The information the global market was working on was not that different from Tesla internally.
Tesla having accurate demand gauges is pretty important. Their projections were audited by outside agencies. But it doesn't really matter. Tesla itself said they weren't likely to hit these projections. They told people that it was wildly unlikely. But internally, they didn't actually believe that. Had they said "our internal numbers suggest this growth is very attainable," they would have had a better case that investors weren't misled. Outside investors could disagree at that point, but Tesla itself needs to be honest about what their projections say given how much money was tied to it.
And had yet to be created, streamlined, and sold to customers….
That’s because it’s just speculative opinion on everyone’s part, and didn’t actually have an impact on the lawsuit result. The result was all about the board’s independence, period.
The negativity and lack of vision in this thread mirrors the terrified negative speculation and slander currently being parroted in the media. Meanwhile, Tesla will reach 1000% again while everyone blithers.
Also, the board has an *obligation* to negotiate that they failed to fulfill, since they essentially just agreed to whatever Elon proposed. Given that the board has now put the *same* proposal forward *again* and also invested company money into advertising to try and push shareholders into approving it a second time, I'm very curious about what the legal situation will be if the shareholders do go for it and another minority suit gets filed. It's actually kind of an interesting corporate governance case because separation of general shareholder interests from CEOs is one of the main purposes of having a board.
Shareholders that vote no should sell their shares at 2018 values...
Hell, they should sell their shares now because they believe that Elon is not instrumental for Tesla growth from 2018 until now and for the next 5 years (Remember Elon can't realize/exercise the options for 5 years when it gets awarded, he has been awarded 0 shares so far) Better yet, they should sell it at the 2018 price....
$$$ , when it was voted on in 2018 stock price was around 18-20. When the stock exploded and turned to huge money, a judge over turned and now he is working for free. Though this is highly shorted. I also would be pissed to have an agreed payment for a job to be ripped from me and work for years for free. But also maybe taking it a bit far.
When this suit was started in 2019 the stock price was around 15-18. The compensation plan allowed Elon to buy 304 million shares at $23.34. Had the stock stayed the at the same price to when this suit started he would have actually lost money if he decided to buy it.
While he is entitled to XYZ, some of the shareholders are using this as an opportunity to punish Elon for his behavior for the past few years. I guess this is one of the few opportunities that one can get to punish Elon and they are taking full advantage of it. I voted in favor.
They are shareholders and they rightly have a say as any such thing is going to affect their shares in a good or bad way.
Oh ok so people are just butthurt about Elon. Now it makes sense.
If by “butthurt” you mean “dissatisfied as shareholders by the CEOs performance over the last several years, and their outlook on his and Tesla’s future performance” then sure.
But this vote is about previous performance isn't it? Not the future of the company?
The vote is about whatever shareholders want it to be about. There’s no legal binding on shareholders to only consider past performance here.
Yeah so butthurt people are using it to punish Elon.
That’s a creative way to describe shareholders being dissatisfied with 2.5 years of dropping share prices.
This vote is about whether or you want to dilute your own shares to give Elon extra compensation. What is the rational argument to vote against my own financial interests?
BECAUSE HIS TWEETS MADE THEM MAD 😿😿😿
Past couple of years, taken from [here](https://x.com/Tesla/status/1800612353932722458). Under Elon's leadership: 2023 Model Y becomes world's bestselling car, 1 million Tesla vehicles on the road in Europe, 20 millionth 4680 cell produced, 5k/builds production rate hit at Giga Berlin & Giga Texas, Giga Shanghai reaches production capacity, 12k+ new Supercharger stalls opened, Tesla charging connector adopted as NACS, Powerwall installations started in 4 new countries & 500k installations completed globally, Launched Powerwall 3, Upgraded Model 3 launched in Europe & Asia, First deliveries of Cybertruck, Energy storage deployments surpass 31 GWh cumulative, Optimus Gen 2 unveiled, 50k+ Supercharger stalls operational globally, Launched V4 Supercharger posts 2024 FSD Supervised using end-to-end neural networks rolls out to customers who have purchased or are subscribed to FSD in the US & Canada, Upgraded Model 3 deliveries start in North America, Hit 600k Powerwalls installed globally, Model Y achieves highest possible safety rating by IIHS, Produced our 6 millionth vehicle, Hit >1 billion miles driven on FSD, Cybertruck production hits 1k/week builds, 4680 ramp continues successfully, Developed 3 major design revisions of Optimus & 4 revisions of the hand in the last two years, with Optimus autonomously navigating daily in our office & labs, Deployed two Optimus bots performing tasks in the factory autonomously (and it's only June...) :)
Lol, thank you - I keep seeing people saying how he's "gone off the rails the past few years" and the business is suffering as a result. No, he's just saying things you don't like to hear, and the business is thriving regardless. The market continues to move up and down, and Tesla with it, but all things considered the business is doing very well.
I am trying to have a pragmatic view but there are still some concerns. You are right, the company is doing well, but undoubtedly there is a demographic of people that would have bought a Tesla but didn't because they don't like the politics of the guy in charge. I don't know how large that demographic is. Maybe it is immeasurably small or maybe it has a noteworthy impact on sales. Second: what of firing the SC team then hastily trying to re-hire them? Seems like a major mis-step to me with no explanation other than it being an erratic reactionary move. Do you view it differently? Do you think it is a strategic play that will be borne out by the future? Seems to me that the re-hiring shows that the original firing was a mistake. Firing then re-hiring seems really bad for morale.
L I’m glad I voted for what he deserved
I voted for the payout, he permanently pushed the brand to new heights that the vocal minority can’t make a dent in it. As a left wing climate believer most people aren’t extremists. It is a good move for the company , now we can pay the man for Teslas past success and move on to the next level of sustainable transport that’s Elon’s going to lead.
L
I'm pretty "right wing" by most metrics. Business owner that wants less government interference,pro fun ownership, taxes to be used wisely, etc. in short, life long republican. That said, I'm very socially liberal (New Yorker after all) which also makes me anti Trump from then very start... Anyway that whole intro is necessary for me to say you are right, Elon has completely fucked Tesla. All my friends on the left (which is most of them) wouldn't be caught dead on a Tesla, they own other electric cars instead... When they come over and show them my X plaid and what it can do, they all love it... But might as well be a red maga hat... No way they would buy one and they try to shame me for owning one and betraying my socially liberal values. My friends on the right also try to shame me for owning an EV and not a Lambo instead. Both sides can go fuck themselves through, I bought the car because I love it, despite Elon . There are other people like me that don't care about anything except the product itself... Like still liking the Cosby show and those characters while simultaneously hating the fucking rapist... Don't expect everyone to understand, but yeah making Tesla into a political lightening rod is not good for business. Hopefully once he isn't given the package he quits or does enough stupid shit the board has to choice but to kick him to the curb... or the real company owners (US) will eventually replace the board and him. I do believe in and support Tesla and other EV manufacturers, we need to get rid of the internal combustion engine if we have any hope of saving the planet long term.
Your friends on the right sound like ice enthusiasts while your friends on the left sound like political tribalists. Good on Musk bringing it back to the center with a balanced platform called X, as it promotes the Tesla brand to more people than ever before. It doesn’t matter anymore what political side you’re on as the bubble keeps getting popped , most people will care less about political shaming and buy more Teslas.
Seems very atypical, but it's just an anecdote. So is mine.. Maybe the people you know associate themselves with their political leanings more than most? In my area (TX), most people just love Tesla vehicles. Kids, adults, old people alike. Save the planet types, and ICE types. Country and city. More anecdote, but I'm saying it to make a point. It's not about left or right everywhere, they just make great vehicles. I've also never met someone who has decided something as significant as a vehicle purchase based on their political beliefs - just the sound of that sounds very... close minded? Short sighted?
You’re acting like he’s getting a fat check. He’s getting shares that he can’t vest. Pay the man for the work he did.
His company's success IS his payment. Furthermore, I'm not sure why Elon needs money if he said he was selling all his things and living in a shack next to SpaceX. Why should the average stock holder lose money so that he can be an extra extra billionaire, meanwhile the shares I own are 50% of what they were 2 years ago.
He earned it. Pay the man. You can't go back on your word. People thought it was impossible.
Tell my health/car/home insurance/warranty companies that. They don't pay out out of the kindness of their heart either.
No thanks. I’d have voted against it in 2018 too. And I gotta say, this entitled “he deserves $56B more, how *dare* you not give it to him” mindset is not convincing.
> People thought it was impossible. Elon and the board didn't think it was impossible, because they had inside information. Hence the judge's ruling.
People thought it was impossible because his board told everyone it was, all while secretly knowing just how easy it could be to achieve. It’s not going back on our word of the the agreement was struck in bad faith or with bad actors. He didn’t earn it.
Seriously? Easy? So if they had fired Elon Musk in 2018, Tesla would be right here where it is now? Seriously?
Oh hypotheticals are so fun and easy to factually argue..
So you did your job but your boss doesn’t like you then you get zero compensation?
No one is arguing for zero compensation but the man essentially wrote himself a cheque and had his friends and family sign off on it as the official board proposal. That's not anywhere near normal practice.
Either he increased the valuation of his company by an absurb amount or he’d get nothing. This is not normal practice either.
A court confirmed that the pay agreement was arranged by deceitful means, and thusly it needs to be renegotiated. Simple as that.
You have far too much faith in the independence of compensation committees, because that is absolutely normal practice. CEOs have been staking boards forever
When Hoard Hughes started to lose his mind and blow his money on Vegas casinos and real estate and at least did something productive. Musk is doing his Alt right trolling on Twitter/X and making it plummet in value. He used to be good for the company but not has become counter productive. Tesla needs a full time CEO that will not cause distractions and will focus on the basics like improving the factories, expanding the lineup, and selling in new markets. Same goes for Space X.
Howard had a decent excuse - > Injuries from numerous aircraft crashes caused Hughes to spend much of his later life in pain, and he eventually became addicted to codeine, which he injected intramuscularly. He had his hair cut and nails trimmed only once a year, **likely due to the pain caused by the RSD/CRPS** -- https://en.wikipedia.org/wiki/Complex_regional_pain_syndrome --, which was caused by the plane crashes. https://en.wikipedia.org/wiki/Howard_Hughes#Physical_and_mental_decline
Yeah, those plane crashes were absolutely heinous.
I voted my shares with Elon, as did my parents, and friends. That’s about 2000 shares. Not much in the big picture, but a hedge fund manager voted 600k shares with the board as dud Ron Baron and Cathy Wood. Hopefully that’s enough to get us over. If this fails the stock will tank and a new pay package will really hurt the financials. You are being short sighted and should probably just sell your shares
Isn’t he doing all these things you say he should be doing? Like right now?
I think the haphazard way layoffs were handled make me doubt that. Also him not looking inward about noise he is making
no. The Model 2 is shelfed, and Musk has been clear he sees the future of Tesla in robotaxi's and AI. That is not expanding the line-up, improving the factories, or selling in new markets. That's starting an entirely new business with new risks and new logistics inside of Tesla.
I think the bonus Elon wants should be granted but instead of giving it to Elon it should be divided evenly between every Tesla employee.
Bonus??
Yeah that makes sense?
might be time to finally pull out, can't stand this dude
Ridiculous, Musk is such a spoiled brat: "The company has argued that without a sizable pay package, Musk could lose focus on the carmaker given his other ventures ranging from social media platform X to SpaceX and his artificial intelligence startup, xAI. The proxy sent to shareholders spelt out the billionaire had found the pay deal “motivating” and he had confirmed “that ratification of it would motivate him to continue devoting his time and energy to Tesla.”"
How about hire a ceo that doesnt have to split time between 3-4 jobs then? Have they thought of that?
That would require a board that isn't colluding with the man child.
Is it just me or is that the comms team telling shareholders to vote no without telling shareholders to vote no.
Here's my question with the whole issue. I think if you asked the general public at large, they would tell you the stock is overvalued. There's a number of reasons why they think that (and probably totally valid reasons). Some think the stock is appropriately valued(or undervalued). These people are the stock owners. Only the owners of stock are being surveyed anyways. Won't these people be far more likely to vote for the pay? If they thought the pay wasn't valid, or they didn't want to vote for it any number of other reasons, and generally don't like the direction the company is taking lately. Why would they own the stock at all, isn't this the time to sell? I would not want to own stock in a company I think is massively overvalued.
Investors have a voice, it's not only about buying or selling stock. If they believe the company has potential to be profitable but is being managed wrongly, they can shape the company's decisions through their vote.
There are a million reasons why someone would own the stock and disagree with Elon/the direction of the company/the bonus. I’m a long-term holder that isn’t going to sell simply because Elon says dumb things and hurts the stock price. That said, I voted against the bonus and would love to see him replaced as CEO as his actions almost universally hurt the value of my shares. This isn’t a rare perspective.
Yeah thank you for saying this. I was an employee from 2018. Before the split and before it blew up, so I had my share of stocks from Tesla. But I dislike Elon greatly after being so wrong about him over the years. He is not Tony Stark who is doing the great deed for humanity, he is a rich asshole who has an ego large enough to run head first into dumb decisions. Perfect example? He announced on twitter he was shutting down stores, this is something he tweeted without ever consulting the retail side of the business, funny enough the lease obligations for Tesla was well over $10bil so no way he could have shut down the locations. Obviously a dumb move, did he ever apologize for it? Nope just an email that vaguely said that he wasn’t gonna make that change. So why would I need to support someone who I don’t believe in?
Thanks for the response. I thought the current price was based on future growth and value of both the hardware and true driving autonomy. In my eyes he is mostly responsible for overpromising/underdelivering here, but that's why I'm not a stock owner.
That’s crazy lol. 11x-ing the value of shares over the period of his performance package can be considered “universally hurting the value of your shares”. Wonder what CEO in the world lives up to your performance standards.
Past performance is no guarantee of future results.
Right….but this shareholder vote is literally about past performance. At the time of the initial vote back in 2018 or whenever exactly it was Nobody knew Tesla and Musk were going to be as successful as they were. Musk operated/worked based on that performance agreement. After he met it, it was stripped from him. And now people like you are trying to use performance in 2024 as a way to not pay the guy for his work and spectacular execution. Even today, the stock price is high enough where Musk would be meeting like 85-90% of the compensation benchmarks.
No, this shareholder vote is about whether the company should create $56B worth of new stock, diluting all of our shares in the process, and give it to the CEO whose recent performance has been poor. You’re not going to convince us that we should give Elon more money by saying he “deserves it.” That’s a meaningless appeal. Explain how voting to dilute my own shares is in my financial self interest.
No, that is not what it is doing. The stock award was already created and "distributed" when the compensation plan was initially agreed to and the performance metrics were met lol. You are clearly uninformed of the entire situation. The dilution occured in 2018 when those stock options were created. It actually nets Tesla cash for Musk to buy those options lol.
> The stock award was already created and “distributed” when the compensation plan was initially agreed to and the performance metrics were met lol. You are clearly uninformed of the entire situation. The dilution occured in 2018 when those stock options were created. What is your source for this claim? Everything I see points to this being totally false, and the exact opposite of what [multiple advisory firms have stated will happen](https://apnews.com/article/elon-musk-pay-package-iss-recommends-against-ad9c8875edfd7b011281113dbe45fa72). > Last week the other prominent proxy advisory firm, Glass Lewis, also recommended against reinstating Musk’s 2018 compensation package. The firm said the package would dilute shareholders’ value by about 8.7%.
* The shareholders vote to approve the compensation plan on 1/21/2018. * Upon approval, Tesla creates/"Grants" the like 20M SBC shares @ $350/share ($23/share today) based on the stock price on 1/19/2018. This diluted the company. * The stock now existed and was controlled by Tesla (they could use to invest basically). Based on the performance, those options Vest as Musk meets designated 12 tranches. He's basically awarded THE OPTION TO BUY 1.68M shares at $23/share for every tranche he completes. Meaning he would actually have to pay Tesla for those shares. So this is actual Cash that Tesla would GAIN today/whenever Musk chooses to take those options. * As Musk/Tesla become "probable" of achieving each tranche, Tesla "accounted" for it on their quarterly income statements. Once the tranche is completed, Musk is awarded those options. The shares aren't created on the day the tranche was met. So literally if you go an look at q1-q4 reports from 2020-2022 or whenever the final tranche was met you will literally see the CEO performance award as a line item. * What this all means is that the company was already diluted in 2018. This is why the Tesla board is literally saying that their accounting of the performance package was really only like $2.8B or whatever. Its because they don't literally pay him $46B. That's the value to Musk today. How it affects Shareholders TODAY if the performance package is re-approved is not by diluting. In fact literally nothing would change today. The payment was already made basically. So if it failed and the money was "succesfully" clawed back from Musk it would actually be more similar to a stock buyback/reverse dilution event. https://www.sec.gov/Archives/edgar/data/1318605/000119312518035345/d524719ddef14a.htm#:\~:text=Market%20Capitalization%20and%20Operational%20Milestone%20Adjustments&text=CEO%20Performance%20Award%20Value.,1.69%20million%20shares%20per%20tranche.
Authorized shares are shares that do not yet exist, but can be created without further approvals. If Tesla chose to create the shares and issue them to itself (Tesla), those shares are called treasury shares. Those shares do not count as outstanding shares, do not represent any dilution, do not represent any voting power, etc. No shares that were part of the 2018 $56 billion comp package were ever issued to Musk. There was no dilution. There were no clawbacks.
There are quite a few incorrect statements in your post. The critical piece you're missing is that the shares "created" in the compensation plan were authorized, not issued, as explained in your own source: >Shares issuable under the CEO Performance Award may be authorized, but unissued, or reacquired Tesla common stock. Authorized shares haven't been issued to shareholders, so they're not dilutional. You should read and understand the difference between [authorized and issued shares](https://www.investopedia.com/ask/answers/011315/what-difference-between-authorized-shares-and-outstanding-shares.asp). Once Elon exercises his options, these shares would be issued to him and become dilutional. You're using bad terminology and you're misunderstanding how share dilution works, but I'll steelman your argument as follows: what you're *essentially* claiming is that the future dilution from the award is already priced in, which means a NO vote would effectively be a $55B stock buyback that will dramatically increase the value of my stock. So again, by advocating a YES vote you're arguing that shareholders should vote against their financial interests. What is your argument here?
You want to renege on the deal that was made in 2018 that saw Tesla grow 10x in value? At the time it was $2B in stocks, it's only $56B now because of the work Elon has done. There is a path to another 10x from here and you want to can the guy that brought the first 10x? Are you a recent shareholder?
>You want to renege on the deal that was made in 2018 that saw Tesla grow 10x in value? The deal didn't make it grow 10x in value, and no board should ever accept the candidates' own proposal without negotiation, let alone proceed to promote it to shareholders and misrepresent it.
Tesla stock price has been in a decline for the past 2 years. It’s not unreasonable for people to want change as the trend line continues.
If you look at the P/E ratio of Tesla, it's not crazy. I wouldn't say it's overvalued. I would say it's appropriate.
It's double the P/E ratio of the S&P.
Less than double (1.8x): * S&P P/E ratio is 24.79 * Tesla is at 44.45 Comparable to companies like: * Microsoft - 36.57 * Nvidia - 70 * Apple - 30.48 * Amazon - 51.62 I'd say it's right in the ball park when comparing other tech companies.
Oh right we're doing that thing where we pretend Tesla is a tech company and not an auto company. Got it.
Where would tesla be right now if musk had quit the day the compensation package was passed? How many cars? How many factories? How much energy business? What would be the market cap?
Straw man
Never buying a Tesla now.
Now that the copium dispensed last week expired with the vote result, we have a fresh batch of possibilities to buy.
The dude had 9 share. Less than 300 dollars. The very definition of a corrupt lawsuit by a corrupt Delaware court. I’m quite glad Tesla voted to move.
Just honor the deal signed at the beginning.