I voted for him to get paid so here is my perspective.
Musk through Tesla greatly accelerated the pace of EV adoption on a global scale. The major Chinese EV companies have stated that they use Tesla as a model. Musk through the Megapack and powerpack has greatly accelerated the use of utility-scale battery storage and home scale solar energy storage. I can’t think of a single business person who has had a greater positive impact on climate mitigation than Musk.
Musk’s Tesla remains the only company that has shown the ability to profitably mass-produce an all-electric vehicle, with a significant fraction of those vehicles almost entirely made in America. Musk’s SpaceX is now doing the bulk of the USA’s space transport. He succeeded over other more politically correct billionaires like Jeff Bezos and Richard Branson as well as well as a Lockheed-Boeing alliance to provide a commercially viable space launch vehicle. Meanwhile, Ukraine is dependent on Musk’s StarLink to direct its successful drone attacks on Russia.
So yes, I will pay the genius dude who sets bold agendas and periodically accomplishes stuff that seem impossible in ways that greatly benefit humanity whatever he wants. I prefer the guy who says stupid stuff but accomplishes great things for the public good over politically correct mediocrities.
As I’ve said before, I think reducing the need for automobile ownership through TaaS would be good for society both environmentally and in making transportation more affordable for the working poor. I am happy to pay Musk to give it a shot.
Why pay him whatever he wants? Why not simply pay him an amount sufficient to make him the highest paid CEO in the country - or even just the amount that will keep him working as the CEO? I mean, the choice here isn’t limited to being between paying him $56 billion and paying him nothing. You could pay him more than any CEO has ever been paid in the history of CEO’s - and still that would be materially less than $56 billion.
I agree. Even the Willow Run film notes the bombers were built just like a car: sub assemblies built up in different areas, brought together at final assembly.
I suspect the hoopla is what Musk does so well: hype.
Being one of the richest dudes in the world, it would seem he has ALREADY been rewarded for all that past work, no? Seriously, I struggle with why he is worth an additional $56B. Especially since he seems to have gone off the rails. The future does not look bright for him.
The odd bit of irony here is that with Tesla’s success elevating it into the S&P 500, it has forced all those mutual funds and ETFs to buy it and they will now be voting on the pay package after suffering nearly 40% in losses YTD on that investment.
The new owners may be less inclined to consider past performance.
The proxy votes of the “owners” are not binding on management. Recall, Jamie Dimon’s $80M payday, after delivering below industry average shareholder return, drew a no vote of some 70%, but he kept every nickle anyway.
Because, like him or not, he is a generational talent.
Also should put the pay package in context. When offered and approved in 2018, the pay package was entirely in stock options. There is/was no salary. So Musk took an enormous risk that he could grow the company. Given that risk, Tesla stockholders deemed the contract fair at the time.
Musk succeeded against pretty large odds and because he was so successful, a judge took that pay package away, deeming that by 2023 standards it is excessive. Seems unfair to me. If Tesla had gone bankrupt and Musk received no compensation, would the stockholder litigant and judge have found that to be unfair? I doubt it.
I was a stock holder in 2018 and felt the offer was fair then. Nothing over the intervening time period has changed my mind. The guy grew the company to a valuation greater than Toyota. He did his job.
So what? Whether he’s a generational talent or not, Tesla is a publicly traded company - you don’t just give the CEO “whatever he wants.” You only need to give him as much as is necessary to both get him to do the job and align his interests with those of the company. Regardless of whether he was taking a big risk or not, he would have absolutely been willing to take that same risk if the payout was “only” $40 billion instead of $56 billion - or even considerably less than that.
Remember, a CEO is just an employee of the company - not the owner. The people who get the benefit if a very risky play on the company comes through are the owners, not the employees. CEO pay is often structured with a significant equity/options component in order to align the interests of the CEO with those of the owners, but that doesn’t convert the CEO position of a publicly-traded company back into the founder role of a private startup. And since Musk had a significant amount of his own personal wealth tied up in Tesla, there was no need to give him any more of the company to align his interests.
IOW, there’s absolutely no business reason for Tesla to pay Musk $56 billion instead of, say, $10 billion - or even $1 billion. Even stipulating that he’s a generational talent, if you can get the generational talent to work for you for $10 billion (again, more than any other CEO has ever been paid in the history of CEO’s), then you don’t need to pay $56 billion.
Maybe you missed a Sandy Munro presentation. It’s mostly about painting the body in white.
Make the pieces
Assemble the body in white
Put on the doors
Paint the body in white
Take off the doors
Fill the body in white with stuff
Put the doors back on
Apparently the reason was to make sure the paint all matched. It’s very hard to make identical color paint. The unboxed process saves a few steps, uses less paint as only the parts that need it are painted. With IoT tags it’s easy to track which doors go on which bodies in white solving the paint mismatch issue. But it goes one step further, since they no longer dip the assembled body in white in paint, they can optimise some of the sub-assemblies such as attaching the seats the floor instead of inserting the seats through the door.
I hope I got that right! Sorry, I can’t find the Sandy Munro uTube video. Here is Tesla’s presentation, less than six minutes:
I mean, that’s the question. Sure, if you could solve the paint mismatching problem you wouldn’t need to assemble cars this way. But has Tesla solved this problem? In theory, it’s super-simple to do - but the devil’s in the actual attempt to implement at scale.
I have related the story before, how a Tandy Corp board member started criticizing the performance of Tandy CEO and Chairman John Roach. The Board member was purged by the simple expedient of not nominating him for reelection.
These days, the CEO controls the Board, usually explicitly as Chairman, but always implicitly as Board members serve at the CEO’s pleasure.
The “owners” are nothing. I repeatedly see shareholder proposals on my proxies to require the company to disclose who it bribes, how much the bribe is, and why. Management always says what management does is none of the shareholder’s business.
Steve…always votes against company officers being on the Board, and for management disclosures to the shareholders.
In 2018 the shareholders signed a CONTRACT with Musk.
A CONTRACT.
“Rule of Law” kinda stuff.
If a CONTRACT is unenforceable … what then?
From 2024 POV, SOME of the “goals SEEM” to have been easy.
But, back in 2018… 6 years ago, the goals were deemed difficult to VERY-unlikely.
The mainstream media covered this “amazing CONTRACT” back in 2018.
6 years ago.
I didn’t feel “scammed” back in 2018. I knew that Musk would be awarded stock options IF certain goals were met.
oooooooooo @btresist
Aside. I’ve not received any communications for voting my shares.
No hard copy, no email, nothing at my brokerage…
Any suggestions for how to vote?
What “consideration” did the shareholders pay to Musk? Without “consideration” it is not a contract.
iirc, the cancellation of retiree health benefits by McDonnell-Douglas hinged on the question of consideration. The non-union employees said the language in the employee handbook, words to the effect “if you work for MdDonnell-Douglas for x number of years, you will receive a company paid pension”, was a contract offer by the company, which the employees accepted by providing the specified years of their life in service to the company. iirc, the court held that the clause in the employee handbook was not a contract, because the employees had not paid “consideration” to the company. Therefore, the health insurance benefit was a gift of the company, and subject to cancellation at the convenience of the company.
Which contract has been held to have been invalid by a court of competent jurisdiction. There are laws governing the formation of contracts, and when a contract fails to meet the requirements for entering into that agreement, the contract is void. Here, the court found that because the contract was entered into by a non-independent Board of Directors, it required shareholder approval after full disclosure - and since the disclosure was not full, such approval did not take place. “Rule of law” kind of stuff.
Yes. That’s what this “competent” court “decided”. And, it’s what y’all keep saying.
So, yes. I “see” your words.
When I look at the stuff that was claimed to not have been full disclosure… I do NOT see anything that I didn’t know in 2018.
I was not scammed!
Therefore I DO NOT trust this judge. I use “compromised/IMO” to describe her.
I have at least 1 (one) share more than the fool plaintiff. Maybe more.
That fool plaintiff and his lawyers are the ones scamming me.
“We” shareholders signed a contract, in good faith, and a “competent” judge negated the contract after the fact … “After the fact” includes fulfilling the “goals” agreed to.
Rule of Law kinda stuff REQUIRES the parties adhere to Law. It appears to me, that in this case, the judge used her “competence” to serve a different master than “Law”.
I also knew (it was talked about in the media) that the BoD included Musk’s brother and “friends”.
AGAIN… I was not scammed back in 2018.
Anyone who was NOT aware had to be unconscious.
If it’s not obvious:
I’m gonna vote the company line.
That’s not really relevant. If something is required to be disclosed as part of the voting process, it doesn’t matter that some of the shareholders might have known about it already. The legal purpose of the disclosure is to ensure that the information is provided to all the shareholders.
Why? The issue is not that the BoD had some members that were “friends” with Musk (or his brother). That happens all the time. The problem is that the BoD: i) failed to hire outside counsel to negotiate the deal to replace the Tesla GC that had a personal relationship with Musk; and ii) they failed to segregate the Compensation Committee from the directors that were friends with Musk. Plenty of folks could be unaware of those facts without being “unconscious.”
BTW, “court of competent jurisdiction” is a technical term of art - “competent” in that phrase doesn’t refer to the skills or capabilities of the judge, but rather that the court is the proper one for those types of disputes to be brought. The term “competent” modifies “jurisdiction,” not the judge or the court.
Effect of Not Obtaining the Required Vote for Approval
If the proposal to approve the Ratification fails to obtain the requisite vote for approval, the Ratification will not be approved.
Required Vote We ask our stockholders to approve the Ratification. The proposal to approve the Ratification requires the following votes of Tesla’s Stockholders:
the affirmative vote of the holders of a majority of the total votes of shares of Tesla common stock cast in person or by proxy at the 2024 Annual Meeting on the proposal, pursuant to the rules of The Nasdaq Stock Market LLC (the “NASDAQ Standard”), and the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the 2024 Annual Meeting and entitled to vote on the proposal, pursuant to Tesla’s amended and restated bylaws (the “Bylaws Standard”), and The affirmative vote of the holders of a majority of the total votes of shares of Tesla common stock not owned, directly or indirectly, by Mr. Musk or Kimbal Musk, cast in person or by proxy at the 2024 Annual Meeting on the proposal, pursuant to the resolutions of the Board approving the Ratification (the
“Ratification Disinterested Standard”).
YES!