Delaware only allows issuing a class of shares with extra voting power before incorporating in Delaware. Not sure about Texas.
Had Delaware not disallowed the first pay package there would be no need for this one.
What exactly does “control of the company mean?” In my opinion it is protecting the company from Wall St. Vultures who want cash distributions like the ones ruining Boeing.
Way back when, I was very much against class B shares with extra voting power saying that if they want my money but not my opinion they should offer me bonds. My mistake was not recognizing the danger Wall St. Vultures pose by short circuiting the cash flow necessary for further developments like AI and robots and robotaxis. One or two years ago there were Wall St. Vultures asking Tesla for dividends or buybacks which I considered absolutely moronic for a business very much still in development.
Oh baloney on a baloney sandwich. The new contract grants him 96 million shares almost immediately as a “good faith” move, for which he has to do almost nothing. He can even underperform the market, reduce the number of cars sold, and walk away with a payday larger than any in history.
This hands him 20% of the 3.9B shares outstanding, at significant dilution to the remaining shareholders. Added to the 19.7% he has now, that puts him somewhere around 40% ownership. It’s worth noting that 40% is not much more than 25% when you are the CEO so closely aligned with a company as Musk is; there is very little resistance to him doing whatever he wants to do anyway. And it’s a giveaway of staggering proportions, bigger than any in the history of business, worldwide. And that’s just the first two years! For doing almost nothing!
Balderdash.
Oh horse feathers. It’s the sign of a board which is so intricately beholden to him that they dare not propose anything less than complete capitulation to any request, no matter how absurd. They have stood by while he directed significant time and money elsewhere: Twitter, election, DOGE - and now come up with this ridiculous compensation plan to try to get him to “focus.” They could do a lot better for a lot less with a bottle of Ritalin and a baby sitter.
I hate going through a bunch of what if posts. I did notice the new mothership idea that would void/bypass the current rules.
Challenge: Tesla shareholders might resist this move, as it could dilute their voting power unless they receive Class B shares proportional to their holdings.
Tesla is in the business of making money, not in the business of making lawyers rich, specially in an atmosphere of “We hate Elon.”
Easy decision for me to not put any investment dollars in TSLA, but I thought that before reading of this newest pay package for him. Musk, as CEO, basically went on hiatus last year. Could even make the case it was worse than that, make the case that his foray into politics was dereliction of duty. He actually attacked the group of people who were his most likely customers.
But all of his supporters, on this thread anyway, feel he is this legendary visionary. So they should throw every spare dollar they have at TSLA. I’m fine with that, it’s their money, they can do as they please. I sure hope full autonomous driving becomes a thing, so I hope they are right about that. TSLA isn’t being valued as a car company though, it’s being evaluated as one of the most innovative companies in the world, maybe ever. So the fickle market won’t take kindly to disappointment.
Right. You should not invest if you are not convinced about the long term future of the company.
I bought Tesla when it was a ~$50B market cap 6 years ago. Today it is a $1T+ market cap. The naysayers were much more vocal 6 years ago. Similar story with AMZN and PLTR.
Looks to me like all the emotion, sarcasm, and misrepresentations are coming from your side of the aisle. An example of the latter is:
In what mathematical universe is 96M 20% of 3.9B? Albaby states as fact that Musk would work for Tesla at a fraction of the compensation package. I think that is utter nonsense. His goal for a decade has been 25% ownership of Tesla, with which he would be secure enough to believe he can pursue his Tesla vision.
Others suggest alternative ways to give that control. Who cares? It’s not the option Musk wants and the Tesla board and the vast majority of Tesla stockholders have no issue with the agreed upon compensation package. Why then pursue a more complicated alternative? Why all this angst from those who have no skin in the game?
I got into Tesla early. Have bought and sold several times since. I mentioned before that Tesla paid for my kid’s Ivy education. What I have invested now is only an opportunity cost risk, a small part of my discretionary portfolio. Point is I don’t feel like I am in a cult. I feel like I made a good investment, have reduced my risk, and am now willing to give the guy the benefit of the doubt based on his past record of success.
It is you guys who I think are letting your emotions about an admittedly unlikeable guy cloud your opinions.
Agreed. I was in TSLA several years ago. But it seemed to me that emotion was driving the price more than the metrics. So I ended up bailing. Made a tidy profit. In hindsight, I should have held on for another year or so. Haven’t looked at their chart since, until now. Seems they mostly are treading water for the past few years, bouncing between 100 and 400. Those are huge swings. I wouldn’t try to time the peaks and valleys (not my style).
IMO, Tesla is facing stiffer competition than when I owned it. Numerous companies are making BEVs now. I own an ID4 (VW). GM has the Bolt. There is Rivian and Lucid, both Hyundai and Kia have models, etc. Tesla had the advantage of being first, but that only gets you so far. Their charger network was a stroke of genius, and does give Tesla an advantage. Though other companies are building-out charger networks, too. It’s just a matter of time before they reach parity with the Tesla network.
I wish TSLA investors well. No animosity here. But I don’t think it’s as good an investment as it was when I was in.
I’m not angsty. I’m interested in it because this is an historic grant of compensation. As I mentioned upthread, no CEO of any company ever in the history of capitalism has ever been given a compensation package worth as much as a billion dollars. Tesla’s going to give Musk one that’s worth about $89 billion on the day of granting. That’s just fascinating.
I’d be more willing to credit Musk’s claim that he has some deep and abiding need to get to the magic number of 25% ownership if: i) 25% ownership actually would give him control in a way that’s different than what he has now; and ii) he hadn’t sold around 200 million shares to buy Twitter. Since the former is utterly implausible, and the latter really undermines the credibility of his position, the best way to analyze this package is for what it is - about two orders of magnitude higher compensation than has ever been granted corporate executive, for the purpose of giving him that much compensation.
I find it fascinating that Tesla shareholders will agree to this (and they will agree to this), and that the board agreed that this would be the package to go to the vote. I don’t personally care or have any feelings about it - I wish all the Tesla shareholders all the luck in the world. I just find it amazing that everyone’s willing to do this.
As noted upthread, Jensen Huang took NVDA from a $100 billion company to a $4 trillion company - and he didn’t get awarded 1/10th of the shares in a new grant. He’ll get $50 million. An increase from last year’s $34 million. Because that’s what CEO’s at world-beating successful companies get paid in compensation for their services at public companies. If TSLA shareholders want to give up 10% of their future value if the longshot comes through, they’re more than free to do it - I just don’t understand why.