Remember the time in the beginning of the year when the court ruled Elon Musk's $56 billion compensation package for his role as a CEO at Tesla as illegal and cancelled the deal? It brought up some interesting details of some kind of collusion amongst board members and Musk to get this high pay package. The arguments was that details of this payment were not disclosed to investors and was too high of a pay for a work of CEO, and something not right was going on there. This drama continued when the lawyers who argued the case against Elon Musk and won became a bit too greedy and demanded the court to award them 10% of the $56 billion and that they deserved $5.6 billion for their legal work. Now that was crazier than what they were trying to correct. Such hypocrisy, I thought. Well, the fight didn't end there, and there is more to come it seems.
Tesla shareholders voted on multiple resolutions and among these resolutions was to approve and reinstate Musk's original $56 billion pay package and move Tesla's incorporation from Delaware to Texas. A lot of companies set their incorporation in Delaware. Probably for tax or legal reasons. Ever since Delaware judge ruled against Musk, he has been telling everybody to move their company incorporation away from Delaware. It seems like a personal revenge actions by Musk. Nevertheless, Tesla shareholders did approve move to Texas. They also approved reinstating Musks $56 billion pay package. Victory for Musk. This is not the end of this story yet. Even though shareholders approved the deal, Musk still legally cannot be compensated this amount. This needs to be resolved in courts. This approval by shareholders may help his case and he may eventually receive all the moneyz he has been demanding. Approval by shareholders is significant, because the main argument against Musk was that there were irregularities in the deal, and shareholders did not receive full information and the deal went against shareholders' interests.
There were shareholders who voted against as well. Among them are Norways sovereign fund, and California Public Employees' Retirement System who hold dozens of millions of shares. However their votes weren't enough and majority voted in favor of Musk. Musk is not a regular CEO that can easily be replaced. Many investors see Tesla success as doings of Musk's genius ideas and actions. We can't really predict future, we can really know if Tesla would be as successful with another CEO. On the one hand I am sure there are plenty of brilliant leaders and innovators that can run Tesla and maybe even take it to the next level. But this is a huge gamble for investors, and investors do not like gambling. They prefer certainty. Why fix something, if nothing is broken?
This reminds me of story of Steve Jobs and Apple. This is a great example of a CEO and a leader that can't actually be easily replaced, and doing so may hurt the company and investors. Jobs made Apple a success story from nothing. But then due to his personality and how he ran things, CEO who Jobs brought in and the board decided to go against Job and pushed him out of the company. After many years it became very clear that it was the worst decision Apple has ever made, and Apple never seen the same success and just kept heading towards bankruptcy. After many years Jobs returned to Apple as an advisor initially, then as a CEO to rescue the company from collapsing and made it a success once again. This efforts made Apple the most expensive tech company in the world, if not the most expensive company. I am not sure if the same thing would happen to Tesla with Musk if history repeated. But there are similarities in the leadership styles, innovation, and character of these innovators. While both are praised for the contributions to technological advancements and innovation, they also are hated by many within the company and outside. Both became super reach early on, both build multiple companies, both liked to be in the public, and both have been great at marketing.
When you see these similarities, it is understandable that investors wouldn't want to make any changes in leadership. And nobody has been talking about replacing Musk either. The drama was all about the money he receive as compensation. The only person who has been mentioning separation of Musk from Tesla has been Musk himself. He has been public about the compensation, stating that he deserves a lot more, otherwise his time is not well spent at Tesla and he is better of innovating elsewhere. And he has many companies to dedicate his time at. Musk has also threatened that he would take his AI efforts and developments in robotics to other companies, instead of keeping them within Tesla. This of course Tesla investors wouldn't want. It may just been cheaper to pay Musk higher pay, just so he keeps all the innovation in Tesla. I don't think these threats by Musk were courteous to the company or the investors. So much ego here. Perhaps he deserves it. It is for the investors to judge and decide. I am not invested in Tesla, and what Elon thinks or does wouldn't effect me. Just shows his character.
This story show how much power and influence Elon Musk has within investors and investors community in general. It is one thing to be able to demand a pay he thinks he deserve, it is another thing to convince investors to change the incorporation and company's legal structures and jurisdictions just because a judge from Delaware may have wronged him. Shareholders votes demonstrate that the sentiment is Must is Tesla, and Tesla is Musk. As such by taking actions against Musk Delaware judge was acting against Tesla. So it makes sense to move away from Delaware to Texas, perhaps where Tesla is welcomed and courts are Musk friendly.
Free market should decide compensations for CEOs and other executives. If shareholders find Musk deserves $56 billion, so be it. In the end shareholders are the ones who suffer the consequences if they made bad decisions, or be part of the success if they made the right call. It is probably shouldn't be judge's decision to cap the pay. In this case, when case went through the court and rulings were made it was clear if majority shareholders would approve such compensations. Now that we know they do, perhaps judge and courts will be willing to join the shareholders and reinstate Musk's pay package. We will see how this will unfold. Good luck Tesla!
Shareholders should sue the courts and the greedy lawyers over tort interference if they don’t let it go through.
California is the worst. He can’t move his companies fast enough out of there. Glad he is getting out of Delaware as well. It’s time certain states realized they can’t just do whatever they want and expect people to put up with their nonsense forever.
While $56 billion is a crazy amount. That man does crazy things. I’ve yet to see a single person who was driving around a Cybertruck in my area not have a $56 billion ear-to-ear grin on their face. Even after seeing a couple of them on the road now. It’s shocking how many look out their windows as they are getting close to one for a better look.
Crazy Crazy it all comes down to a vast majority of people doing nothing and trying to control others and getting a fat paycheck for it instead of the person actully doing it and building it. There's FAR too much red tap, permits, restrictions etc.
Tesla is really doing a very great job and they are really going a very great work
Elon Musk is a real nutcase
Anything to keep his great image and (obviously his money) 🤑.
I'll comment anyways even if I only read the first paragraph.
As of SEPTEMBER 2021, Musk didn't had this kind of money in his cloud wallet.
He was awarded a $56 billion pay package in 2018. (You forgot the dates, but doesn't matter)This compensation package was designed to incentivize Musk to achieve a series of ambitious performance targets for Tesla, including increasing the company's market capitalization and revenue growth.
Paypackage was structured in such a way that Musk would receive STOCK options over a PERIOD of 10 years with each tranche of options vesting only if Tesla met specific FINANCIAL goals and market capitalization"milestones". If all targets were met, Musk stood to receive BILLIONS of dollars in stock options.
Present world, Musk has achieved several of the milestones outlined in the PAY PACKAGE, leading to a significant increase in Tesla's market capitalization and stock price. This has resulted in Musk's net worth increasing substantially, making him one of the richest individuals in the world. Tesla current stock price is at around $178 it's down since the last few days I've checked where it was up over 3%.
Overall, the $56 billion pay package for Elon Musk was tied to his PERFORMANCE and the success of Tesla, and the significant increase in Tesla's valuation has led to Musk's WEALTH GROWING substantially.
IT WOULD BE NICE if we all can borrow Musk's neuron cells!
Wow
Elon Musk did everything he could do to get back his pay package. Musk is playing a big role in Tesla
I hope he does well
No doubt dearest Elon Musk's influence on Tesla is undeniable. It’s interesting how his presence impacts the company's success. The comparison to Steve Jobs is absolutely perfect, sometimes, the leader's vision is irreplaceable, period.. the best person to handle anything is the one that built it
I read a great book that went into how the best CEOs are showmen, always promoting their company. Jensen Huang, Musk, Jobs and even Buffett all have that aura about them.
You're looking at dust, dear. These individuals differ in terms of their primary source of WEALTH, industry expertise, net worth, and philanthropic efforts.
It's nice to see that he finally got back his pay package. Elon is irreplaceable for Tesla as the figurehead and it might be a long battle, but it should motivate Elon to do a good job as well.
They set a sprat to catch a mackerel.
I think Elon Musk deserves what he caught. He should be motivated to do more. He is a good contributor to Tesla.
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STOPor to resume write a wordSTARTIt’s fascinating to see how much faith Tesla shareholders have in Elon Musk’s leadership, even approving his controversial $56 billion pay package. This highlights their belief that Musk's vision and innovation are critical to Tesla’s success.
While the legal battle continues, this vote underscores the strong alignment between Musk’s strategy and shareholder interests.