The board needs to release a statement on the comp package decision and how it plans to handle it. Hopefully they had been working on one incase of this decision, so should be ready to go.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Unfortunately it seems like Elon will decide the response and the board will go along with it which is what the judge used to void the package.
Artful Dodger
"Neko no me"
From the general tone of the ruling, this board has almost no chance of drafting a comp. plan that wouldn't be challenged in (a biased Delaware) court. Even 3rd-party 'independent' contributors are going to get hauled into court, simple because this ruling has chummed the waters, and the shark can smell the odor in the water...
I think the first move has to be to redomicile the company to Texas, we'll know shortly (Elon's poll was set to 24 hrs -- as if that wasn't also pre-planned as a response to this event).
A new comp. plan can come once the Delaware issue is resolved. Quickest way is simply to not appeal the ruling, but move forward elsewhere.
Buckminster
Well-Known Member
If this means Elon won't give a state of the nation talk then I'm going to get really mad at this judge! 
Artful Dodger
"Neko no me"
If this means Elon won't give a state of the nation talk then I'm going to get really mad at this judge!
Indeed, Elon's announcement 2 weeks ago that he would do a special presentation on Tesla's future after the 10-K was filed very likely means that the Chancery Court gave Tesla pre-warning that they would release this decision following the 10-K.
Good point, it would be good to get some indication that Elon is not going anywhere (I have no doubt he is committed to Tesla) but the FUD around this will be fairly relentless. Hopefully the move to Texas happens and that should put to bed any rumours of his lack of commitment to the company.
Create Musk Holdings
Transfer his shares from various ventures into it.
Sell shares in Musk Holdings
Use proceeds to buy TSLA and create new companies.
This maintains Elon's control of existing companies, but dilutes ownership. For TESLA it increases ownership and control. Companies that need extra cash can raise it from Musk Holdings rather than having further investment rounds.
This would avoid diluting existing TSLA shareholders and stop short selling dead (as at any time Musk Holdings could buy large amounts of TSLA).
Musk Holdings would have to be a private company, so limited opportunities for retail investors.
Transfer his shares from various ventures into it.
Sell shares in Musk Holdings
Use proceeds to buy TSLA and create new companies.
This maintains Elon's control of existing companies, but dilutes ownership. For TESLA it increases ownership and control. Companies that need extra cash can raise it from Musk Holdings rather than having further investment rounds.
This would avoid diluting existing TSLA shareholders and stop short selling dead (as at any time Musk Holdings could buy large amounts of TSLA).
Musk Holdings would have to be a private company, so limited opportunities for retail investors.
In the sense that not issuing shares is a buyback...
Yes, it reduces the fully diluted share count (GAAP EPS)
No, it does not reduce the current share count
No, it doesn't cost Tesla money
On Delaware Chancery Court decision and the prude collection of comments:
All anyone need do is use a wayback machine and look at this from a 2018 perspective.
I remember, so using only memory:
-In the process of trying to launch Model 3 there were huge doubts if it could ever really happen;
-There were huge questions about distribution, even if the thing could be made;
- distribution was spotty and powerful forces were aligned against BEV;
- They were making this thing in the Oakland California area, in a failed plant where everyone intelligent had given up manufacturing;
- Sure people lined up to reserve one or two at minimal cost, why not, it could work. (Note: one of my two reservations still stands because they still have no Brazil distribution)
At the time, as a stupidly optimistic shareholder I thought it would be impossible to achieve. Why not give a giant sized incentive if he could lead to impossible goals?
The judge in this case really displays bias against massive entrepreneurial success. It isn’t Nestle or British American Tobacco. It’s a scrappy obnoxious little South African nouveau riche arrogant company. She went against him on Twitter only to see him return even richer!
We can argue facts, but the case was not decided on facts.
The Delaware Supreme Court usually defers to Chancery decisions. Will this be different?
From the 2018 Proxy statement on which we voted in confirmation (at least I did):
“Importantly, we modeled this performance award on the prior performance award that Elon received in 2012. We believe his prior award was instrumental in helping Tesla achieve the objectives laid out in the original Tesla Master Plan and the tremendous stockholder value that was created as a result. In just the five years after that award was put in place, our market capitalization has increased 17x. By linking Elon’s compensation entirely to Tesla’s performance so that he does not receive any compensation unless all our stockholders benefit from significant value creation, the new performance award will similarly ensure that Elon and the team are totally aligned with stockholder interests going forward.”
All anyone need do is use a wayback machine and look at this from a 2018 perspective.
I remember, so using only memory:
-In the process of trying to launch Model 3 there were huge doubts if it could ever really happen;
-There were huge questions about distribution, even if the thing could be made;
- distribution was spotty and powerful forces were aligned against BEV;
- They were making this thing in the Oakland California area, in a failed plant where everyone intelligent had given up manufacturing;
- Sure people lined up to reserve one or two at minimal cost, why not, it could work. (Note: one of my two reservations still stands because they still have no Brazil distribution)
At the time, as a stupidly optimistic shareholder I thought it would be impossible to achieve. Why not give a giant sized incentive if he could lead to impossible goals?
The judge in this case really displays bias against massive entrepreneurial success. It isn’t Nestle or British American Tobacco. It’s a scrappy obnoxious little South African nouveau riche arrogant company. She went against him on Twitter only to see him return even richer!
We can argue facts, but the case was not decided on facts.
The Delaware Supreme Court usually defers to Chancery decisions. Will this be different?
From the 2018 Proxy statement on which we voted in confirmation (at least I did):
“Importantly, we modeled this performance award on the prior performance award that Elon received in 2012. We believe his prior award was instrumental in helping Tesla achieve the objectives laid out in the original Tesla Master Plan and the tremendous stockholder value that was created as a result. In just the five years after that award was put in place, our market capitalization has increased 17x. By linking Elon’s compensation entirely to Tesla’s performance so that he does not receive any compensation unless all our stockholders benefit from significant value creation, the new performance award will similarly ensure that Elon and the team are totally aligned with stockholder interests going forward.”
Last edited:
But they can be very biased, and even corrupted.
Note I'm not saying for certain this judge is biased or corrupted, but your blanket statement is not keeping in line with human behavior, and judges are only human.
Even CNBC at the time thought it was crazy Elon would want this.
And the model 3 reservations cost 1k. That’s pretty significant IMO.
The Delaware Chancery Court is not a vestige of democracy. It is the legacy of autocratic practices dating to the Duke of York. It was created in 1792, to sustain ancient royal hegemony in the recently formed new country.
cliff harris
Member
So?
It sounds like this judge thinks its suspicious that successful people that get stuff done are those who can maintain good business relationships over a long period. Maybe most US companies are led by a series of disinterested CEOs that stride through a revolving door every few years, but the idea that any company not run that way is suspicious is absolutely insane.
I have a lot of sympathy for Elon's desire to have taken Tesla private! (but glad he did not).
I look forward to Tesla becoming a Texas company, and this nonsense distraction being put behind us. The board need to sort this ASAP, so we can get Elon;s company talk, and get refocused on the model 2, Optimus, Semi, CT ramp and FSD.
Tesla's mission is URGENT. There is no time for this nonsense.
I wish people would read the ruling before posting, it's nothing to do with the amount awarded or the details of the targets, it's boils down to the board not being independent of Elon. Whether this is the case or not is down to the Judge's evaluation of the evidence. There is no corruption, not left wing plot by Biden etc.
This doesn't affect Tesla's day to day operation or short/long term plans, it's a simple legal issue that can be resolved via appeal or domestication into another state. It could have a positive effect if the board is made more independent of Elon.
The shareholders are independent of the board and Elon.
We voted for, and Tesla implemened, the plan as presented. Board and Elon's friendliness is irrelevant. No one said, "This is the best deal we could get."
If Board's judgemental is so suspect, Delaware needs to cancel every shareholder vote that went the direction of the Board's recommendation...
UkNorthampton
TSLA - 12+ startups in 1
Does it make up to $55 billion available as a buyback? Would have to borrow, use cash/investments or do a smaller ($5-15 billion) buyback. I'm not in favour, but if shorts piled in on the FUD/court decision, could be "fate loves irony"
Similar threads
- Locked
- Locked
