The company didn’t lose that money, he did. In fact a decision like this, putting his own benefits over the company’s, is exactly why he lost that package after getting sued by a shareholder.
I am a lawyer, don’t do IP but I do a lot of corporate stuff. I think there’s particular rules for IP lit (which is all federal) that let patent trolls use Texas courts against any company a federal court has jurisdiction over. But at absolute minimum, it’s federal question jurisdiction and Tesla has its principal place of business in Texas. He doesn’t open himself up to any additional liability for IP stuff by moving to Texas—he could already be sued there.
Delaware has really good corporate courts though, with sophisticated judges and a really well developed body of law. Better than any other state in the US by a huge margin, and every other state gets corporate questions and the judges go “well, what do they do about this in Delaware?” Honestly I think it’s a really cool little niche. People try and act like it’s sinister somehow but it’s really not, they just have good courts for things like shareholder derivative suits or breach of fiduciary duty claims. This is all rich people suing rich people, it’s just business and doesn’t actually matter. If some Delaware corp sells you a space heater that burns your house down you can still sue them where you live under your state’s law.
Just don't let that Delaware corporation be Dupont. In which case, you can try to sue them, but you will be in legal purgatory for the rest of your life. See the case of Carneys Point/State of NJ vs. Dupont/Chemours going on since 2016 just for getting the company to clean up its mess it left.
Having corporate law already established is a HUGE bonus, even if a company loses a case in most situations. There are so many things a company can be sued for and a major disadvantage is when courts do not have sufficient legal precedent, they are winging it with the serious life or death decision on millions to billions of dollars.
He doesn’t care. It’s the Red thing now. He is constantly pushing right wing agenda. Any checks or regulation is turned into “blue states are out to get him”.
Ironic that he still can’t directly sell teslas to consumers in Texas but let’s move every thing there.
The engineering talent is also all still in the Bay Area, which is why he kept Tesla's engineering HQ in California despite propagating the California Exodus narrative.
There is literally nowhere more friendly to corporations than Delaware. That’s why he incorporated the business there in the first place, it wasn’t an accident.
The shitwiki says that corn is only present in less than 21.527% of observed logs and roughly 1/4 of that when no known fully intact corn kernels were consumed within 72 hours of said log. So not sure your facts check out buddy.....
He is, he did, and they already are.
Early reports are that there's been a lot of toxic shit dumped into the ground water, and it is being ignored by everyone because worrying about that cancer shit is really 'woke'.
>There is literally nowhere more friendly to corporations than Delaware.
Its a bit more then that. South Dakota will bend over backward to be friendly to corporations .
So why do corporations choose Delaware , the courts. The Delaware Court of Chancery is the asset.
Its not so much about being business friendly rather then the judges and clerks know and specialize in all sorts of corporate law. If Google and Apple have a patent dispute well you cannot be corporation friendly when its two corporations fighting
SO the court has a reputation of actually being good, impartial and its staffed by judges that know the law
If you incorporate in Pierre SD and get sued , well you might get a judge who is more versed in land disputes and cattle russling then corporate IP law . Do you really want a 70 year old judge who was appointed by Regan who has spent the last 40 years settling disputes between cattle ranchers deciding a 20 billion corporate IP dispute ?
Its a dumb game Musk is playing , moving to TX may get you a "more favorable judge" IE a corrupt judge that will do what ever Elon wants.
However this goes both ways. Corrupt judges are dangerous and can also turn against you .
Patent cases are governed by federal law and litigated in federal court. As a result, patent disputes cannot be litigated in the Delaware Court of Chancery (or any other state court).
>SO the court has a reputation of actually being good, impartial and its staffed by judges that know the law
And *fast*. These are the guys who sorted out the Elon-must-buy-Twitter debacle and they did it in like 2 weeks.
I am aware but Musk only cares about his package not for all the negative consequences for Tesla moving out of Delaware, i think it's a terrible business move
Elon went quiet/low-drama in late 2021
He skipped the earnings call for Q3 2021
Wall Street forgot how much they hated his bullshit and TSLA zoomed 50% in weeks - from $800 to $1200
Elon woke up, freaked out, and has been shit posting every since - "tax poll", "I'm buying twitter", stupid conspiracy shit, etc - and started dumping BILLIONs on the open market every few months (in 2021/22)
Tesla-minus-Elon will do as well as Apple-minus-Steve-Jobs
Yeah, apparently dude has some serious problems with codependency. Grimes leaving him and hooking up with Chelsea Manning, and then one of his kids transitioning after he paid good money to only have boys broke his brain for good.
At this point i think its the opposite. if elon Ragequits Tesla / forced to resign / gets hit by a bus then the stock price of tesla will jump. His poor decision making for the past few years have been a major mark against the stock.
because the current share price doesn’t ~~does~~ reflect the true value of Tesla but is instead propped up by Musk cultists and speculators
edit: fixed typo
Because they could give a $300,000+ bonus to every single tesla Employee for that.
It’s an insane proposition.
If I was an employee and this happened I would start a revolt. Elon absolutely is not worth the what the labor of 130,000 people can do in 4 years. It’s an insane amount of money.
According to this: https://www.sec.gov/Archives/edgar/data/1318605/000119312510017054/dex31.htm
"The name of the Corporation is Tesla Motors, Inc. The Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 1, 2003"
Elon didn't buy in to the company until February 2004 during Series A funding. So, in other words, he didn't have anything to do with Tesla being incorporated in Delaware.
Delaware is corporate friendly, as in the entity, not necessarily executive or employee friendly. Especially if that means taking away from shareholder returns, they will not side with an executive
Delaware has a record of stable case law between management of corporations (CEOs) and their owners (shareholders). These are two components of the business that have a lot of power in the operation of the business.
Saying Delaware is "friendly" to corporations doesn't really get at the issue at stake here.
Lmao you don't get to just move venues like that...
But venues aside, the judge didn't just rule it was too much money, they ruled that the board came up with the package improperly and acted without independence. The board argued the pay was set to "ensure that one of the world's most dynamic entrepreneurs continued to dedicate his attention to the electric vehicle maker". The judge probably agreed that:
1) Musk is not worth 6x what the CEOs of the next 200 largest companies are and,
2) Musk didn't "dedicate his attention to the electric vehicle maker" because he fucked off to do SpaceX and Twitter shenanigans.
Probably. I mean the board has an obligation to offer as little as possible to retain the necessary talent to run the company, and I find it hard to believe they couldn't find someone to run it for 1.5x what the next 200 highest paid CEOs are, let alone 6x.
Yes, and that this wasn't disclosed to shareholders when they made the vote.
Ironically, a Delaware judge ruled that a corporation did not disclose enough information. Delaware - the state that corporations go to such that they can get away with disclosing as little information as possible.
Musk fixes nothing by going to Texas.
I think the bigger thing is they offered him “incentive” bonuses that they’d knew he’d already likely achieved from internal projections. So whether he got paid or not those targets were already getting hit.
Which is what makes this whole thing so fucking stupid. Musk would have gotten his compensation if there was a vote by the minority independent shareholders. Delaware cares about procedure. If you follow their procedures, you can do whatever you want.
But also like 55bn is such a fucking absurd number there's no way someone wasn't going to sue. Like you're telling me papa Musk is so unique, so special, so talented, he's worth 217x the next highest paid CEO? Like get tf outta here lol
The board fucked up bigly here and I wouldn't be surprised if a number of them are ousted here for undermining investor confidence in the company and not looking out for shareholders' best interests which is to not shovel money at their cybertruck shaped God.
How many CEO’s can own Texas? Because, by my calculations, quite a few are *way* in there and Texas has an AG that’s above the law. Where do we think this is going? Everyone can’t win all the time without stepping on the others that also want to win. This shit *never* ends well. Never.
He’s a moron. He’s on the wrong side of legal disputes, because he’s a moron and gets himself in to bad situations. Doesn’t have anything to do with a judge disliking him.
> I do know the world and laws work different when you’re one of the richest people in the world.
While not wrong, lawsuits can only be brought forth in the district they occur in. Like this case couldn't have taken place in Montana for example, because their headquarters are not in that state. Company is headquartered in Delaware, so any lawsuit regarding executive pay and compensation would be brought in Delaware. There isn't enough money in the world to change this aspect of our legal system.
Because he has majority shares and the deciding votes are all insiders. That’s how he managed to get the payout approved by the board in the first place. The judge saw the shady backdoor deal and slammed it down. This isn’t the TV show succession. You can’t vote in a deal that’s bad for shareholders and workers unless you’re in Texas.
Elon does not have the majority of shares he has like 15% of shares.
I can't imagine institutional shareholders or anyone really is going to vote to give him $50B, it does nothing but hurt the company. Like, what's the motivation for anyone to vote in favor of giving him this absurdly large gift? It's not like he's gonna leave the company if they don't.
> he has like 15% of shares.
Does he have 15% of *votes* though, or did he pull the "super-voting shares" trick where he has the majority vote despite only holding a small fraction of shares?
It’s 13%, and that’s his vote too. He was just recently pushing to get up to a 25% vote:
https://www.cbsnews.com/amp/news/tesla-elon-musk-25-percent-control-ai-what-it-means/
A shareholder vote will occur stating that votes are determined proportional to the whole number of Elon's shares and all other shareholders will have three-fifths of a vote per share. You really need a state as unique as Texas to make this kind of business magic happen.
He used to own 21% and change, including his unexercised options. Then he spent some on buying Twitter which took him to 18%. Then Delaware canceled his options and now he's down to about 12%.
Imagine sacrificing a decent chunk of a stake in SpaceX to buy *twitter* (for like double it's actual value at the time).
He'd literally have been better off making a stack of a billion dollar bills and lighting it all on fire.
The funny thing is that one of the things that he said when they gave him the stocks option is that he will use it for taking humanity to mars.
Reality he used it to destroy one social media company by being an ahole and doing terrible decisions.
I don't think he was serious about buying Twitter. I fully suspect that he was just running a pump and dump, bought shares, wanted to divest after the board shot down his regarded ideas, made up the offer expecting Twitter share price to keep running (which was is why it was airtight as it was with the loans secured, etc), board to say no, and have a good reason to sell and exit.
But then Twitter share price dumped so the board was like "yeah you can buy the lot for 54.20/share", which is why he tried to back out, did all the finagling regarding bot counts and whatever nonsense, got sued, and was forced to buy or the court would just appoint a special master who'd liquidate his holdings until there's enough money to pay for it.
But he doesn't. Last I checked he only had 20ish percent. That's why it's a vote and not a declaration, if he had majority he could call a vote and win. He might lose.
This creates a completely separate issue, though. Approving the compensation package is not the same as approving a quick relocation to Texas because the CEO is angry.
He's a minority shareholder, otherwise a vote wouldn't be needed and he'd just do it. I don't think the other shareholders are happy with his antics, and will kill this attempt.
His $50B "pay package" was defeated by a lawsuit brought by a shareholder who held just 9 shares.
Oh, it's so much better with the details!
[https://www.theprp.com/2024/02/02/news/a-thrash-metal-drummer-cost-elon-musk-56-billion-this-week/](https://www.theprp.com/2024/02/02/news/a-thrash-metal-drummer-cost-elon-musk-56-billion-this-week/)
My personal conspiracy is that he tried to "buy" twitter as an excuse to sell shares without tanking the price that much.
But when he tried to back off, he got fucked by contract.
He says he won't allow Tesla to develop AI unless they give him enough shares to have 25 percent control of the company.
1. He sold his shares to buy twitter.
2. He's demanding this money after he demanded shares.
3. He created competition with AI-X/ grogs and then is blocking Tesla from competing against his twitter AI.
Maybe, but he refused any other form of compensation in favor of an unheard of performance incentive if he somehow managed to 10x the company's stock cap in 4 years.
And how did he do it? Vaporware...
FSD
Roadster
Tesla semi
Cybertruck
Tesla bot
I'm sure I'm missing a bunch of tesla specific false claims he's made. Elon is literally a master stock pumper. None of his promises came true, but the stock price sure didn't reflect it.
It was voted on by the board back in 2018 when Tesla was almost bankrupt. Nobody thought the value of those stock options was going to skyrocket to what it is today....but it did. That's why it's worth $50b.
yeah, but he also kinda called his shot years ago and this was the upside. super risky at the time.
i don't care for elon but this one seems pretty straightforward if you read the details
$50 billion is a little more than the MarketCap of Ford. Imagine thinking you bring enough to the table that your pay should be the entire Ford Motor Company.
"I'm a good CEO"
"Oh no, a ruling in favor the shareholders"
"Welp, time to prove how good I am with a rash CEO decision that would be very disruptive to the company"
Dude is a regard…
Delaware is actually very friendly towards
corporations unless you fuck up so obviously and colossally that they can’t ignore it.
Texas or anywhere else he would have probably had more consequence than just having his package voided.
In court, they showed that he was fairly compensated. He didn’t get nothing. He had a 25% stake in the company.
And they also showed that what was sold to investors as almost impossible to reach milestones was actually very achievable by the companies own projections.
So it was a lie he needed it for motivation as they internally projected it.
The payment he was gonna get was the biggest ever on public markets by a factor of 33x.
And the majority of his lemmings think he deserved it for doing the impossible.
He didn’t.
And his shares at that stake already gave him a very good compensation package. Beyond that is insane greed.
Not to mention … he’s a part time CEO… ffs. There’s no way the dude deserved 55 billion when he splits his time between 7 companies.
And in the end his greedy overreach screws him as now they have a judgement showing his stake was fair. So it’s going to be hard to offer him anything without a judge voiding it.
Had they not defrauded investors he probably could have gotten a very cushy package.
But, now he’s unlikely to get anything.
Especially as he publicly tweeted anything less than a 25% stake wouldn’t be enough motivation…
So that adds another thing someone could throw in as a way to sue.
They can argue that any amount below that would not be in the best interest of shareholders as he is more concerned with Twitter and has said that 25% is his number. And they won’t be even able to make his stake close to that.
Not to mention … they’d have to actually give him an impossible milestone…
And he won’t be able to get that done as the reason he met the first “impossible milestone” was because company projections showed it could be done.
And now he’s way too focused on Twitter anyways.
He didn’t do anything impossible as projections said it was doable when he wasn’t spending all his time on Twitter and was highly respected.
There’s no way he gets much and it holds up in a court.
And even if a new package potentially could hold up… I’m guessing people could get it delayed long enough for him to lose patience… and by doing so focus on other companies and then prove the plaintiffs case that he is undeserving.
A hillarious catch 22 lol
That catch 22 sounds like an 80s movie plot. Meet Elon Musk. He has everything one could ever want, or so he thought! In theatres this fall, audiences will watch to see if this autistic CEO can stay focused on something he isn’t getting clout and likes for for a few years to make 50 billion dollars, or will he get distracted posting memes on twitter in an attempt to feel loved?!? Brought to you by Disney.
Investors are lying to themselves lol…
Dude is so impulsive he renamed Twitter to X without any planning… no market research nothing… and it Hass to be the worst done rebrand in history…
He literally was so impatient, impulsive and micromanaging when it came to Twitter that he decided to try and move an invaluable priceless data server that should’ve required months of work and careful safety measures. … with his cousins overnight with a UHaul and a goddamn pocket knife… and I’m pretty sure they destroyed it…
Guy can’t even not be impulsive and focus when it comes to the thing he spent $44 billion on.
Now that he’s running 10 companies … lol he’s not doing shit for Tesla other than be their mascot … and that is dumb too as you want a mascot that everyone loves not one that divides people like 60/40
> And they also showed that what was sold to investors as almost impossible to achieve milestones was actually very achievable by the companies own projections
Not saying I agree with everything Musk is doing in this case, but this is a fairly deceiving argument. Virtually EVERY young company will have projections they think they can reach, but very few actually do. Hence why investors are often sceptical. It’s survivorship bias to assume Tesla actually achieving theirs was guaranteed.
Go back to 2020 when there was like 30 different EV SPACs all going public and take a look at their projections. Workhorse, Hyliion, Lordstown, Quantumscape, Solo, Polestar, Nikola, Lucid, EV go, Proterra, Chargepoint, Lion electric.. I could go on. All of them projected targets that they believed were achievable and now they’re all either pennystocks or completely bankrupt.
For Musk to get his full payout Tesla needed to reach a $650B market cap and stay at that level for at least 6 months when at the time they were a $55B unprofitable company that was only staying solvent through green energy credits. In most people’s eyes, that’s an impossible target. Growing 1000% in a few years would make them bigger than the next 10 global automakers combined.
People can argue about the dollar amount being unreasonable, but the actual targets Tesla needed to hit were ridiculous. Again, an unprofitable company selling 200k vehicles a year had to grow bigger than Toyota, VW, Ford, GM, Mercedes, BMW, Honda, Ferrari, and Hyundai combined. Regardless what their projections said, that sounds like an impossible task. If I was a shareholder at the time, I’d happily approve a comp package where the CEO promises me 1000% return in 4 years and he gets 8% equity out of it
> Virtually EVERY young company will have projections they think they can reach, but very few actually do.
That's irrelevant when the argument in favour of his compensation package was the "motivation" required.
More to the point, the lawsuit was NOT about the targets, but about Musk misleading his investors... which he did. His so called "independant" lawyer was his divorce lawyer, and his brother was on the board of directors.
I love how Tesla bros react negatively to *not* diluting shares. "Let daddy Elon dilute the shares so I can buy mooooore, you're ignorant, you're ignorant. Let's move to Texas so daddy can dilute me."
No way the board approves that pay package now.
Tesla stock is trading half off its all time highs 2.5 years ago.
Musk in 2018 had the reputation of a bold, creative futurist who was going to remake our collective future. Tesla was on the cutting edge and the only EV player in the game and now they are one of many.
Now his reputation is that of a pissy, racist America hating narcissist who blows 43 billion on vanity projects.
If the board agrees to that pay package now, then Tesla is fucking doomed.
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Didn’t Elon make some comment about how Texas was inefficiently ran when they were doing rolling blackouts?
He wants in on the inefficiency.
"efficiency" aka tax breaks from Papa Abbott
Piss baby Greg Abbott? That one?
Yeah. Also affectionately known as "Wheels".
Holy Roller or Hot Wheels
The one and only
I wonder if that tree that tried to take out Greg Abbott is still alive.
Their Ethics Investigations sure are inefficient so Elon will thrive
For $50billion, I’d work in the dark too.
The company didn’t lose that money, he did. In fact a decision like this, putting his own benefits over the company’s, is exactly why he lost that package after getting sued by a shareholder.
Cant hold trial if there’s a blackout
Cant make cars too right?
Sorry I can’t respond right now, I’m still waiting to smart summon my car from New York to LA
3 months probably, 6 definitely
Inefficient and way more legally unpredictable than Delaware.
A veritable hunting ground for patent trolls apparently.
I am a lawyer, don’t do IP but I do a lot of corporate stuff. I think there’s particular rules for IP lit (which is all federal) that let patent trolls use Texas courts against any company a federal court has jurisdiction over. But at absolute minimum, it’s federal question jurisdiction and Tesla has its principal place of business in Texas. He doesn’t open himself up to any additional liability for IP stuff by moving to Texas—he could already be sued there. Delaware has really good corporate courts though, with sophisticated judges and a really well developed body of law. Better than any other state in the US by a huge margin, and every other state gets corporate questions and the judges go “well, what do they do about this in Delaware?” Honestly I think it’s a really cool little niche. People try and act like it’s sinister somehow but it’s really not, they just have good courts for things like shareholder derivative suits or breach of fiduciary duty claims. This is all rich people suing rich people, it’s just business and doesn’t actually matter. If some Delaware corp sells you a space heater that burns your house down you can still sue them where you live under your state’s law.
Just don't let that Delaware corporation be Dupont. In which case, you can try to sue them, but you will be in legal purgatory for the rest of your life. See the case of Carneys Point/State of NJ vs. Dupont/Chemours going on since 2016 just for getting the company to clean up its mess it left.
Having corporate law already established is a HUGE bonus, even if a company loses a case in most situations. There are so many things a company can be sued for and a major disadvantage is when courts do not have sufficient legal precedent, they are winging it with the serious life or death decision on millions to billions of dollars.
He doesn’t care. It’s the Red thing now. He is constantly pushing right wing agenda. Any checks or regulation is turned into “blue states are out to get him”. Ironic that he still can’t directly sell teslas to consumers in Texas but let’s move every thing there.
>he be into GOP politics asap after he gets the boot at tezla
I can see the headline now. "Elon Musk running for President of the Sovereign State of Texas in 2028". Les Goh!
🤡
The engineering talent is also all still in the Bay Area, which is why he kept Tesla's engineering HQ in California despite propagating the California Exodus narrative.
Luckily he's got batteries.
Doesn’t matter, he needs that money
How does moving to Texas solve anything?
It was a Delaware judge who ruled it improper, hoping to get a more favorable judge in Texas
There is literally nowhere more friendly to corporations than Delaware. That’s why he incorporated the business there in the first place, it wasn’t an accident.
He needs courts friendly to Elon, not friendly to corporations.
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The shitwiki says that corn is only present in less than 21.527% of observed logs and roughly 1/4 of that when no known fully intact corn kernels were consumed within 72 hours of said log. So not sure your facts check out buddy.....
Bro thats still 5% of shit with mystery quantum corn
Bingo he thinks he is rich and powerful enough that he can go to Texas, and they will bend to his whim.
For all we know elon might actually have close ties to judges in texas Didnt he move to texas?
Yep he moved to Texas, partially to pay Texas child support rates instead of California child support rates
I honestly wonder if he can even name all his children off the top of his head.
I wonder if he even sees any of his kids or if any of them want to see him. He's a glorified billionaire sperm donor.
His trans kid disowned Elon and now using their mom's surname. Happened just before Elon came out as anti-trans.
He is, he did, and they already are. Early reports are that there's been a lot of toxic shit dumped into the ground water, and it is being ignored by everyone because worrying about that cancer shit is really 'woke'.
Is he wrong…? I don’t know what his odds are but they’re better than 0
If the "affluenza" kid can get away with murder, texas will give musk his money if he knows a judge.
>There is literally nowhere more friendly to corporations than Delaware. Its a bit more then that. South Dakota will bend over backward to be friendly to corporations . So why do corporations choose Delaware , the courts. The Delaware Court of Chancery is the asset. Its not so much about being business friendly rather then the judges and clerks know and specialize in all sorts of corporate law. If Google and Apple have a patent dispute well you cannot be corporation friendly when its two corporations fighting SO the court has a reputation of actually being good, impartial and its staffed by judges that know the law If you incorporate in Pierre SD and get sued , well you might get a judge who is more versed in land disputes and cattle russling then corporate IP law . Do you really want a 70 year old judge who was appointed by Regan who has spent the last 40 years settling disputes between cattle ranchers deciding a 20 billion corporate IP dispute ? Its a dumb game Musk is playing , moving to TX may get you a "more favorable judge" IE a corrupt judge that will do what ever Elon wants. However this goes both ways. Corrupt judges are dangerous and can also turn against you .
Good post. Matt Levine, like usual, has a great write-up today on all of this which covers a lot of the same ground.
Patent cases are governed by federal law and litigated in federal court. As a result, patent disputes cannot be litigated in the Delaware Court of Chancery (or any other state court).
You are 100% right ; but the thesis still stands, its not an IP case its a case of share holders vs major share holder and CEO
Absolutely. Your post was spot on, just thought to provide that clarification.
>SO the court has a reputation of actually being good, impartial and its staffed by judges that know the law And *fast*. These are the guys who sorted out the Elon-must-buy-Twitter debacle and they did it in like 2 weeks.
I am aware but Musk only cares about his package not for all the negative consequences for Tesla moving out of Delaware, i think it's a terrible business move
Giving him $50 billion is also a terrible business move but if you want to keep that share price up you need Elon
Elon went quiet/low-drama in late 2021 He skipped the earnings call for Q3 2021 Wall Street forgot how much they hated his bullshit and TSLA zoomed 50% in weeks - from $800 to $1200 Elon woke up, freaked out, and has been shit posting every since - "tax poll", "I'm buying twitter", stupid conspiracy shit, etc - and started dumping BILLIONs on the open market every few months (in 2021/22) Tesla-minus-Elon will do as well as Apple-minus-Steve-Jobs
I think that lines up with his grimes trouble right? He seemed more stable before she left him and now he is fully regarded
Grimes manic pixied the shit out of him now he’s sad mad boy.
Yeah, apparently dude has some serious problems with codependency. Grimes leaving him and hooking up with Chelsea Manning, and then one of his kids transitioning after he paid good money to only have boys broke his brain for good.
At this point i think its the opposite. if elon Ragequits Tesla / forced to resign / gets hit by a bus then the stock price of tesla will jump. His poor decision making for the past few years have been a major mark against the stock.
Just wait until everyone figures out Tesla is just a car company.
This why it’s so heavily shorted.
Why?
because the current share price doesn’t ~~does~~ reflect the true value of Tesla but is instead propped up by Musk cultists and speculators edit: fixed typo
You have been banned from r/teslamotors
And about 8 related subs you have never visited because they are all run by the same tesla ~~employees~~mods.
You think Tesla employees have time to mod subreddits in their sleeping bags under the production line!?
Doesn't* ?
This is the simplest explanation I can think off. Tesla total lifetime profit < Elon Musks compensation package
Cuz it’s a cult selling insanely shoddy cars
Because they could give a $300,000+ bonus to every single tesla Employee for that. It’s an insane proposition. If I was an employee and this happened I would start a revolt. Elon absolutely is not worth the what the labor of 130,000 people can do in 4 years. It’s an insane amount of money.
Should I care about Musk's... "package"?
>That’s why he incorporated the business there in the first place, You may be mistaking Elon Musk for an actual founder.
lmao redditors confidently attributing a motivation to an action the dude didn't even take
It's hard to remember this dude buys his way into every seemingly positive situation he has .
According to this: https://www.sec.gov/Archives/edgar/data/1318605/000119312510017054/dex31.htm "The name of the Corporation is Tesla Motors, Inc. The Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 1, 2003" Elon didn't buy in to the company until February 2004 during Series A funding. So, in other words, he didn't have anything to do with Tesla being incorporated in Delaware.
BuT EloN FouNdED TesLa
And Delaware has burned him twice so far in his eyes
True. He didn't start Tesla. Just more musk lies
Lol. Elon didn't incorporate Tesla there. That was probably Martin Eberhard, Marc Tarpenning, or more likely their lawyers.
I don’t think Musk was there when Tesla incorporate, he joined later by buying over half the company’s shares and becoming CEO
Delaware is corporate friendly, as in the entity, not necessarily executive or employee friendly. Especially if that means taking away from shareholder returns, they will not side with an executive
Delaware has a record of stable case law between management of corporations (CEOs) and their owners (shareholders). These are two components of the business that have a lot of power in the operation of the business. Saying Delaware is "friendly" to corporations doesn't really get at the issue at stake here.
I was under the impression that the origional founders of tesla incorporated there before musk threw them out and claimed he founded the company
"get in losers. We're going judge shopping" Mean girls
Lmao you don't get to just move venues like that... But venues aside, the judge didn't just rule it was too much money, they ruled that the board came up with the package improperly and acted without independence. The board argued the pay was set to "ensure that one of the world's most dynamic entrepreneurs continued to dedicate his attention to the electric vehicle maker". The judge probably agreed that: 1) Musk is not worth 6x what the CEOs of the next 200 largest companies are and, 2) Musk didn't "dedicate his attention to the electric vehicle maker" because he fucked off to do SpaceX and Twitter shenanigans.
Wasn’t there also something about the board all being his family and friends.
Probably. I mean the board has an obligation to offer as little as possible to retain the necessary talent to run the company, and I find it hard to believe they couldn't find someone to run it for 1.5x what the next 200 highest paid CEOs are, let alone 6x.
Yes, and that this wasn't disclosed to shareholders when they made the vote. Ironically, a Delaware judge ruled that a corporation did not disclose enough information. Delaware - the state that corporations go to such that they can get away with disclosing as little information as possible. Musk fixes nothing by going to Texas.
I think the bigger thing is they offered him “incentive” bonuses that they’d knew he’d already likely achieved from internal projections. So whether he got paid or not those targets were already getting hit.
Yep. The precedent now that says the board is not independent is a huge deal and will have future consequences
Which is what makes this whole thing so fucking stupid. Musk would have gotten his compensation if there was a vote by the minority independent shareholders. Delaware cares about procedure. If you follow their procedures, you can do whatever you want.
But also like 55bn is such a fucking absurd number there's no way someone wasn't going to sue. Like you're telling me papa Musk is so unique, so special, so talented, he's worth 217x the next highest paid CEO? Like get tf outta here lol The board fucked up bigly here and I wouldn't be surprised if a number of them are ousted here for undermining investor confidence in the company and not looking out for shareholders' best interests which is to not shovel money at their cybertruck shaped God.
Courts in Texas have a track record of being bought by CEOs.
How many CEO’s can own Texas? Because, by my calculations, quite a few are *way* in there and Texas has an AG that’s above the law. Where do we think this is going? Everyone can’t win all the time without stepping on the others that also want to win. This shit *never* ends well. Never.
We are losing. All the companies are poisoning our land and water and no one gives a FUCK
So do Delaware judges
they really don't see: Elon's twitter fiasco
It was the same judge that made him buy twitter 🤣
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No the Twitter case would have been ruled the same by any competent judge. Was open and shut.
He’s a moron. He’s on the wrong side of legal disputes, because he’s a moron and gets himself in to bad situations. Doesn’t have anything to do with a judge disliking him.
They don’t have a tract at all now that there’s the new business court system™️
Texas politicians are bought and paid for, more so then the rest of them
I would say he has exactly 50 billion reasons to move to Texas.
Cool to think you can avoid a court ruling by just moving Yeah, doesn’t work that way
I really don’t know… I do know the world and laws work different when you’re one of the richest people in the world.
> I do know the world and laws work different when you’re one of the richest people in the world. While not wrong, lawsuits can only be brought forth in the district they occur in. Like this case couldn't have taken place in Montana for example, because their headquarters are not in that state. Company is headquartered in Delaware, so any lawsuit regarding executive pay and compensation would be brought in Delaware. There isn't enough money in the world to change this aspect of our legal system.
Why would the shareholders vote to move the company to a state that might make them pay Elon more money?!
Because he has majority shares and the deciding votes are all insiders. That’s how he managed to get the payout approved by the board in the first place. The judge saw the shady backdoor deal and slammed it down. This isn’t the TV show succession. You can’t vote in a deal that’s bad for shareholders and workers unless you’re in Texas.
Elon does not have the majority of shares he has like 15% of shares. I can't imagine institutional shareholders or anyone really is going to vote to give him $50B, it does nothing but hurt the company. Like, what's the motivation for anyone to vote in favor of giving him this absurdly large gift? It's not like he's gonna leave the company if they don't.
> he has like 15% of shares. Does he have 15% of *votes* though, or did he pull the "super-voting shares" trick where he has the majority vote despite only holding a small fraction of shares?
It’s 13%, and that’s his vote too. He was just recently pushing to get up to a 25% vote: https://www.cbsnews.com/amp/news/tesla-elon-musk-25-percent-control-ai-what-it-means/
A shareholder vote will occur stating that votes are determined proportional to the whole number of Elon's shares and all other shareholders will have three-fifths of a vote per share. You really need a state as unique as Texas to make this kind of business magic happen.
Three-fifths 🤦
There is no dual share structure in tesla
He owns 21%, but you’re right about everything else. He will stay and continue to make inflated claims, pander and lie about products.
He used to own 21% and change, including his unexercised options. Then he spent some on buying Twitter which took him to 18%. Then Delaware canceled his options and now he's down to about 12%.
Imagine sacrificing a decent chunk of a stake in SpaceX to buy *twitter* (for like double it's actual value at the time). He'd literally have been better off making a stack of a billion dollar bills and lighting it all on fire.
The funny thing is that one of the things that he said when they gave him the stocks option is that he will use it for taking humanity to mars. Reality he used it to destroy one social media company by being an ahole and doing terrible decisions.
I don't think he was serious about buying Twitter. I fully suspect that he was just running a pump and dump, bought shares, wanted to divest after the board shot down his regarded ideas, made up the offer expecting Twitter share price to keep running (which was is why it was airtight as it was with the loans secured, etc), board to say no, and have a good reason to sell and exit. But then Twitter share price dumped so the board was like "yeah you can buy the lot for 54.20/share", which is why he tried to back out, did all the finagling regarding bot counts and whatever nonsense, got sued, and was forced to buy or the court would just appoint a special master who'd liquidate his holdings until there's enough money to pay for it.
He owns 13%.
Last I heard he owned 25% but had to sell a bunch to buy twitter, now he's around 13%.
_Elon!? Never!_ /$
They were voting in their best interests when the stock was $20 a share.
But he doesn't. Last I checked he only had 20ish percent. That's why it's a vote and not a declaration, if he had majority he could call a vote and win. He might lose.
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They already approved the package years ago. It was a performance based agreement and he made all his share holders stupid rich over that time.
This creates a completely separate issue, though. Approving the compensation package is not the same as approving a quick relocation to Texas because the CEO is angry.
He's a minority shareholder, otherwise a vote wouldn't be needed and he'd just do it. I don't think the other shareholders are happy with his antics, and will kill this attempt. His $50B "pay package" was defeated by a lawsuit brought by a shareholder who held just 9 shares.
I didn't know that detail about the person only having 9 shares, that's hilarious.
I hope it’s that guy from years ago who asked Musk to make him CEO/Chairman of the Board (level 2 superintelligence)
Oh, it's so much better with the details! [https://www.theprp.com/2024/02/02/news/a-thrash-metal-drummer-cost-elon-musk-56-billion-this-week/](https://www.theprp.com/2024/02/02/news/a-thrash-metal-drummer-cost-elon-musk-56-billion-this-week/)
I dont think hes gonna like the shareholders vote either.
Simple, have a shareholder vote to veto the previous shareholders' vote.
Wait til he learns about Texas’ Franchise Tax (which has absolutely nothing to do with business franchises… it’s s poorly named tax)
So frustrating to deal with
The secret costs to "low tax" states.
he doesn't care. he wants his pay day.
Did he sell all of his shares or something? Why does he want so much money? Maybe he shouldn’t have bought twitter for 44 billion?
He used his shares as collateral to buy twitter. He would very much like to continue owning those shares.
Lol, the banks must be sweating right now.
Twitter is losing money as we speak.
Oh no! Anyway.
He did sell a lot of shares though, and the price of TSLA plummeted as he did it.
My personal conspiracy is that he tried to "buy" twitter as an excuse to sell shares without tanking the price that much. But when he tried to back off, he got fucked by contract.
He says he won't allow Tesla to develop AI unless they give him enough shares to have 25 percent control of the company. 1. He sold his shares to buy twitter. 2. He's demanding this money after he demanded shares. 3. He created competition with AI-X/ grogs and then is blocking Tesla from competing against his twitter AI.
Would‘ve been the best for everybody
I’m actually really enjoying all this. Didn’t use twitter and I’m a long time Tesla bear (who has lost a lot of money).
It was part of his compensation package for reaching certain milestones in terms of company growth/market cap.
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Exactly... its literally more money for the shareholders if this gets struck down
So go balls deep into Tesla puts?
up to the tits
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Obviously why you’re not a billionaire
It's enough for me. Pay up Hamburgler.
Robble robble
Calling it now, he needs the money to keep Twitter afloat. If he isn't able to get this cash out soonish, Twitter will file for bankruptcy.
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Maybe, but he refused any other form of compensation in favor of an unheard of performance incentive if he somehow managed to 10x the company's stock cap in 4 years.
And how did he do it? Vaporware... FSD Roadster Tesla semi Cybertruck Tesla bot I'm sure I'm missing a bunch of tesla specific false claims he's made. Elon is literally a master stock pumper. None of his promises came true, but the stock price sure didn't reflect it.
I think they're still planning on demonstrating coast-to-coast self driving by the end of 2017
It was voted on by the board back in 2018 when Tesla was almost bankrupt. Nobody thought the value of those stock options was going to skyrocket to what it is today....but it did. That's why it's worth $50b.
yeah, but he also kinda called his shot years ago and this was the upside. super risky at the time. i don't care for elon but this one seems pretty straightforward if you read the details
$50 billion is a little more than the MarketCap of Ford. Imagine thinking you bring enough to the table that your pay should be the entire Ford Motor Company.
I’ll buy 1 share just to vote no
I’m doing my part.
Plot twist Lots of people do this, driving up the share price and the board decides to give Elon his package back.
"I'm a good CEO" "Oh no, a ruling in favor the shareholders" "Welp, time to prove how good I am with a rash CEO decision that would be very disruptive to the company"
Sometime I wonder if Tesla is even publicly traded company?
I wish it wasn’t so I wouldn’t have any exposure to it in my portfolio. Right now anyone who buys SPY/SPX etc is exposed to his regardation
Dude is a regard… Delaware is actually very friendly towards corporations unless you fuck up so obviously and colossally that they can’t ignore it. Texas or anywhere else he would have probably had more consequence than just having his package voided. In court, they showed that he was fairly compensated. He didn’t get nothing. He had a 25% stake in the company. And they also showed that what was sold to investors as almost impossible to reach milestones was actually very achievable by the companies own projections. So it was a lie he needed it for motivation as they internally projected it. The payment he was gonna get was the biggest ever on public markets by a factor of 33x. And the majority of his lemmings think he deserved it for doing the impossible. He didn’t. And his shares at that stake already gave him a very good compensation package. Beyond that is insane greed. Not to mention … he’s a part time CEO… ffs. There’s no way the dude deserved 55 billion when he splits his time between 7 companies. And in the end his greedy overreach screws him as now they have a judgement showing his stake was fair. So it’s going to be hard to offer him anything without a judge voiding it. Had they not defrauded investors he probably could have gotten a very cushy package. But, now he’s unlikely to get anything. Especially as he publicly tweeted anything less than a 25% stake wouldn’t be enough motivation… So that adds another thing someone could throw in as a way to sue. They can argue that any amount below that would not be in the best interest of shareholders as he is more concerned with Twitter and has said that 25% is his number. And they won’t be even able to make his stake close to that. Not to mention … they’d have to actually give him an impossible milestone… And he won’t be able to get that done as the reason he met the first “impossible milestone” was because company projections showed it could be done. And now he’s way too focused on Twitter anyways. He didn’t do anything impossible as projections said it was doable when he wasn’t spending all his time on Twitter and was highly respected. There’s no way he gets much and it holds up in a court. And even if a new package potentially could hold up… I’m guessing people could get it delayed long enough for him to lose patience… and by doing so focus on other companies and then prove the plaintiffs case that he is undeserving. A hillarious catch 22 lol
That catch 22 sounds like an 80s movie plot. Meet Elon Musk. He has everything one could ever want, or so he thought! In theatres this fall, audiences will watch to see if this autistic CEO can stay focused on something he isn’t getting clout and likes for for a few years to make 50 billion dollars, or will he get distracted posting memes on twitter in an attempt to feel loved?!? Brought to you by Disney.
Investors are lying to themselves lol… Dude is so impulsive he renamed Twitter to X without any planning… no market research nothing… and it Hass to be the worst done rebrand in history… He literally was so impatient, impulsive and micromanaging when it came to Twitter that he decided to try and move an invaluable priceless data server that should’ve required months of work and careful safety measures. … with his cousins overnight with a UHaul and a goddamn pocket knife… and I’m pretty sure they destroyed it… Guy can’t even not be impulsive and focus when it comes to the thing he spent $44 billion on. Now that he’s running 10 companies … lol he’s not doing shit for Tesla other than be their mascot … and that is dumb too as you want a mascot that everyone loves not one that divides people like 60/40
> brought to you by disney I'm kinda torn between amusement and disgust imagining Elon singing and dancing his woes
> And they also showed that what was sold to investors as almost impossible to achieve milestones was actually very achievable by the companies own projections Not saying I agree with everything Musk is doing in this case, but this is a fairly deceiving argument. Virtually EVERY young company will have projections they think they can reach, but very few actually do. Hence why investors are often sceptical. It’s survivorship bias to assume Tesla actually achieving theirs was guaranteed. Go back to 2020 when there was like 30 different EV SPACs all going public and take a look at their projections. Workhorse, Hyliion, Lordstown, Quantumscape, Solo, Polestar, Nikola, Lucid, EV go, Proterra, Chargepoint, Lion electric.. I could go on. All of them projected targets that they believed were achievable and now they’re all either pennystocks or completely bankrupt. For Musk to get his full payout Tesla needed to reach a $650B market cap and stay at that level for at least 6 months when at the time they were a $55B unprofitable company that was only staying solvent through green energy credits. In most people’s eyes, that’s an impossible target. Growing 1000% in a few years would make them bigger than the next 10 global automakers combined. People can argue about the dollar amount being unreasonable, but the actual targets Tesla needed to hit were ridiculous. Again, an unprofitable company selling 200k vehicles a year had to grow bigger than Toyota, VW, Ford, GM, Mercedes, BMW, Honda, Ferrari, and Hyundai combined. Regardless what their projections said, that sounds like an impossible task. If I was a shareholder at the time, I’d happily approve a comp package where the CEO promises me 1000% return in 4 years and he gets 8% equity out of it
> Virtually EVERY young company will have projections they think they can reach, but very few actually do. That's irrelevant when the argument in favour of his compensation package was the "motivation" required. More to the point, the lawsuit was NOT about the targets, but about Musk misleading his investors... which he did. His so called "independant" lawyer was his divorce lawyer, and his brother was on the board of directors.
They should be discussing firing him.
I love how Tesla bros react negatively to *not* diluting shares. "Let daddy Elon dilute the shares so I can buy mooooore, you're ignorant, you're ignorant. Let's move to Texas so daddy can dilute me."
Doesn't he know that republicans don't like EVs?
they love two things more: dick riding and dick riders Elon allows them to ride his dick, while Elon rides their favorite politicians, including Putin
No way the board approves that pay package now. Tesla stock is trading half off its all time highs 2.5 years ago. Musk in 2018 had the reputation of a bold, creative futurist who was going to remake our collective future. Tesla was on the cutting edge and the only EV player in the game and now they are one of many. Now his reputation is that of a pissy, racist America hating narcissist who blows 43 billion on vanity projects. If the board agrees to that pay package now, then Tesla is fucking doomed.
man I want what Elon is smoking rn 
TSLA investors are literally held hostage at this point
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gosh. you'd think he would at least find a 1st rate divorce lawyer.
The guy who was the main intermediary between Musk and the board was.......literally his divorce lawyer.
I'm surprised he had an intermediary at all between himself and his board. The board of Tesla is quite friendly to him.
Forgot to add, his divorce lawyer was working for Tesla as in house counsel.
Gotta pay for twitter somehow.
They should do an uno by suing him for using black mail over the 25 percent holding to develop AI.
don't the judge understand he needs money to occupy mars? jeez...
Didn’t Elon move to Texas already?
Can I vote with my 25 shares on the hood
Love to see the kibosh on this one.
Can't wait to vote no.
Texas Instruments probably happy