It was a shareholder initiated lawsuit against the compensation package.I am confused, and I'm wondering if someone can clarify what the above means. How can a judge void an agreement made between a CEO and a company? What does a judge have to do with any of it? Is this voiding future TSLA options Elon hasn't taken yet, or past TSLA options he already claimed?
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
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Oh great point! So does that mean refiling previous 10Q/10K or does it go on Q1 2024's?
Yeah I'm aware of the lawsuit, but on what grounds does a Delaware judge have the power to null a business compensation agreement? Like why did the judge feel it was "unfair", for what reason?
Does this happen often in the business world, where judges deny CEO's their compensation like this? Because I've never heard of something like this before.
An investor just had a judge overturn a business agreement approved by the Tesla board, to me that seems like it shouldn't be legal nor possible without a super duper serious reason?
18.8% if he retained 60% of the options post exercise, but with the deal/grant he would have had around 22% shares right?
17.8% at 50% retention (after tax and exercise).
The judge spent 200 pages explaining why it needed to be voided.
tl;dr; Not enough animosity...
I think lawyers will be lining up to sue every single company and declare their CEO's comp package is unfair. I mean, if fairness is the only issue, then how can any of them be worth the money, right? Let's start with the Oil and Gas companies, and then the large banks, Wall Street, etc!!!
paraphrasing (not a lawyer) seems like in this case the judge ruled that Musk controlled the company to an extent that he had to much influence over his own compensation.
Maybe it’s sufficient to let the shareholders vote over the compensation package instead of the board.
seriously, everyone is paying the waiter a tip of 18% for waiting on them... the waiter NEVER makes you the leader in multiple industries.... now 25% looks reasonable and doable but how to do it and not have a judge in Delaware change the agreement?
We did vote on it. But the court found that we weren't given complete and accurate information. So, we didn't make an informed decision.
It is possible that they will just send it to a shareholder vote again, with complete and accurate information. (I think that would resolve the issue.)
Exactly. What is stopping Delaware judges from nullifying other CEO compensation plans if they want to? Seems like a slippery precedent being set here to me?
Buckminster
Well-Known Member
Another benefit (assuming it is not overturned) is that Elon won't be selling shares in 2028.
Next up in Bizzaro World:
California sues Delaware to reinstate the plan because they won't get any taxes from a new one...
California sues Delaware to reinstate the plan because they won't get any taxes from a new one...
Artful Dodger
"Neko no me"
Chancery Court of Delaware decision:
BREAKING: ELon Musk LOSES $55 BILLION Pay Package Law Suit | Brighter with Herbert (Live)
BREAKING: ELon Musk LOSES $55 BILLION Pay Package Law Suit | Brighter with Herbert (Live)
I suggest people read the first part of the judgement (just the first 8 pages) to get a better sense of how the judgement was reached.
Most of us here I would guess are perfectly fine with the comp plan as it was, but the judgement lays out why the Judge ruled that Musk & the Tesla board did not construct the plan in an appropriate manner (basically Musk had too much control and board failed to act correctly). Also makes the case that the independent directors are not actually independent directors due to their prior personal & business relationships to Musk.
Scanning the opinion... (disclaimer: I have no views on whether it is upheld on appeal but would note that all appeals are tricky).
Very colorful language.
Favorite line so far.
"In the final analysis, Musk launched a self-driving process, recalibrating the speed and direction along the way as he saw fit. The process arrived at an unfair price. And through this litigation, the plaintiff requests a recall."
Very colorful language.
Favorite line so far.
"In the final analysis, Musk launched a self-driving process, recalibrating the speed and direction along the way as he saw fit. The process arrived at an unfair price. And through this litigation, the plaintiff requests a recall."
Is the tax rate lower in Texas? That would be good for Elon.
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