Nope, the entire 2018 plan has been voided.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
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Artful Dodger
"Neko no me"
But the ruling states it voids $55B of his compensation plan. Wasn't the complete 2018 plan worth much more than that?
I was confused by this ruling as shareholders approved the package and how come all the failed CEOs who get huge payments haven’t been stopped ?
Then I saw the bit about the independence of the board and I accept the board is not as independent as I would like but does this mean new board members are needed before any other payments are approved?
Also this ruling creates a paradox where many companies mess up but an independent board can create reward packages for themselves, the board members get huge payments even though the company has huge disasters ( for example the banks during the financial crisis and Boeing recently)
Then I saw the bit about the independence of the board and I accept the board is not as independent as I would like but does this mean new board members are needed before any other payments are approved?
Also this ruling creates a paradox where many companies mess up but an independent board can create reward packages for themselves, the board members get huge payments even though the company has huge disasters ( for example the banks during the financial crisis and Boeing recently)
It was when the stock was trading at $400.
304M shares * $180
In round numbers ignoring exercise and taxes
Analysts: "There's no way for Tesla to grow earnings in 2024".
Delaware Courts:
Delaware Courts:
Again, the shareholder vote was essentially voided because the board failed to give us complete, and accurate, information, preventing the shareholders from making an informed decision.
Artful Dodger
"Neko no me"
This was an extreme, likely activist, position taken by this particular judge, for two reasons:
- the Burden of Proof is NEVER on the Defendant, ALWAYS on the Plaintiff (this is so basic a mistake as to be staggeringly wrong in legal terms), and
- the "Fairness" of the CEO Comp plan was voted upon, and settled, by the shareholders on March 31, 2018. If the Majority felt it was a unfair plan, the plan would not have been adopted by a vote of Shareholders.
Here's the problem going forward for any new Comp plan: Would Elon trust that he won't get the 'Delaware Rug-pull' again after he's done all the hard work? I sure wouldn't, and sadly would vote against such a plan. Pay the man some cash, BoD! You got lots.
Lots of confusion, tomorrow could be telling. But doesn't this essentially mean that the 55B debt is no longer owed? (Yes we'll make it good, that comes later). This sounds like a ginormous write off type event for Tesla. Shouldn't the stock rise... at least until the debt is clarified or paid?
Krugerrand
Meow
Does it state specifically what shareholders didn’t know? Specifically.
Well surely even though the Board was expecting that the judge would find that the pay package was valid, they had to have a plan in mind in case it was not. And quite possibly Elon's recent statement(s) about 25% voting control were meant to anticipate this ruling, thus freeing the board to develop a pay package that focuses not just on pay but perhaps more importantly Elon's desire to control Tesla's AI and robotics programs going forward.
As such, I agree with the statement above that this particular ruling will not be appealed. This, from a capitalist perspective, is disappointing since the ruling opens the door to future attempts to make corporate and shareholder decisions subject to judicial overview (scary)! While corporations do in a sense resemble the way our government is put together with a legislative and executive aspects (i.e. Board and CEO), they don't have a judicial branch since they don't have a constitution per se... the Board handles many of those responsibilities by attempting to ensure the Mission isn't violated.
But from a Tesla perspective it may enable the Board to do what I stated above with a new package that addresses Elon's concerns and definitely quicker than if this ruling is appealed. Gonna be a wild month I think...
When is Elon's coming address to Tesla supposed to happen? Early February? Can't come soon enough.
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I see, seems to me the judge has voided it on a technicality.
Elon and the board should acknowledge they need to be more competent to meet legal requirements.
This is a perfect chance to come up with a new bigger package with a longer time frame.
(This time hire even more expensive lawyers to judge proof it)
(This time hire even more expensive lawyers to judge proof it)
That's right. Goog currently down 5.6%. Tsla caught up in that in addition to court ruling.
Appeals go directly to the Delaware Supreme Court. On average, a ruling is made in 30 days.
Especially companies that operate internationally.
powertoold
Active Member
Can someone expand on this? Here's my thought process on this:
1) The court claims Elon had too much control over his own compensation, board wasn't independent enough, the process for devising the compensation plan wasn't transparent, etc.
2) But do the shareholders really need to know the minutia of the process in order to vote on the compensation plan at face value?
3) The shareholders were voting on fairness of the compensation plan itself, not the details of how it was devised. It's like if you were deciding whether to buy a car, and all the details of the car were presented accurately, but you have no idea how the final price was determined. You don't need to know how the price was determined, you just need to decide whether you like the price or not.
4) I don't see anything deceptive about the actual compensation plan at its face value. The details of the plan itself wasn't hiding anything from the shareholders.
But how could the Tesla board assure that some random future Delaware judge doesn't void it down the road?
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