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Elon Musk: Officially a fraud and piece of shit. Official or unofficial war criminal?


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29 minutes ago, Anastasis said:

Over 70% of shareholders approved the deal right? IIRC the deal was roundly considered to have impossible milestones, and Elon was at risk of taking on zero compensation if he did not achieve the milestones.

I know Elon is going to get all the hate, some of it rightfully deserved, but doesn't seem like a great example. If any of us entered into a comp agreement approved by our stakeholders where we were at risk for zero unless milestones were met, hit every one of those milestones, even the ones that were stretch stretch goals, and then had a court come in to invalidate that contract, we'd be pissed. 

It the US Supreme Court is taking a case to discuss my pay, I am a pretty happy motherfucker.  

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https://www.reuters.com/business/environment/tesla-sued-by-california-counties-over-hazardous-waste-2024-01-31/

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Jan 31 (Reuters) - A group of 25 California counties have sued Elon Musk's Tesla (TSLA.O), opens new tab, claiming the electric vehicle maker mishandled hazardous waste at its facilities across the state.

 

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2 hours ago, Anastasis said:

Over 70% of shareholders approved the deal right? IIRC the deal was roundly considered to have impossible milestones, and Elon was at risk of taking on zero compensation if he did not achieve the milestones.

I know Elon is going to get all the hate, some of it rightfully deserved, but doesn't seem like a great example. If any of us entered into a comp agreement approved by our stakeholders where we were at risk for zero unless milestones were met, hit every one of those milestones, even the ones that were stretch stretch goals, and then had a court come in to invalidate that contract, we'd be pissed. 

So let's take a look at your comment here and dissect it in terms of the arguments made in the case:

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Over 70% of shareholders approved the deal right?

Yes, however the primary argument was that shareholders were mislead on specifics of the deal. The key parts being that Musk was the architect of the plan, not the Board of Directors, and the Board is a bunch of people whole are Musk's cronies:

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The board of directors consisted of a lot of people who had close relationships with Musk:

  • Elon Musk.
  • Antonio Gracias, a member of the compensation committee and friend of Musk’s who has amassed a great deal of wealth from investing in Musk’s companies as far back as PayPal.
  • James Murdoch, another Musk buddy who vacationed with Musk across the globe.
  • Musk’s brother, Kimbal.
  • Ira Ehrenpreis, one of the members of the compensation committee, acknowledged to the court that his relationship with Elon and Kimbal Musk had “significant influence on his professional career.”
  • Brad Buss, another member of the compensation committee who “owed 44 percent of his net worth to Musk entities.”
  • Robyn Denholm, a member of the compensation committee whose compensation as a Tesla board chair was more money than she made from other sources.
  • Linda Johnson Rice, who appears to have been truly independent.
  • Steve Jurvetson, who had a prolonged period of absence during this incident and wasn’t considered a major player by the judge.

 

Yes, the last two people there weren't key players, but that's 2/3 of a board that owes Musk a great deal and Musk himself. Seems like a conflict of interest to me. And so those people all "negotiated" Musk's deal and then presented it to the shareholders.  Hmmmmm.

The next point you raise is the milestones themselves:

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IIRC the deal was roundly considered to have impossible milestones, and Elon was at risk of taking on zero compensation if he did not achieve the milestones.

The milestones were based on the stock price of Tesla and their market cap has risen tremendously for reason well outside of the actual performance of the company.  Compared with other companies their Price to Sales ratio is kind of out of whack:

https://www.macrotrends.net/stocks/stock-comparison?s=price-sales&axis=single&comp=TSLA:F:TM:HMC:GM

Take Tesla away from that:

https://www.macrotrends.net/stocks/stock-comparison?s=price-sales&axis=single&comp=F:TM:HMC:GM

What's also interesting is that Tesla's stock only started acting funny around 2018. Just a quick question - when did Musk sign that deal that linked his compensation to Tesla's market cap again?

https://www.macrotrends.net/stocks/charts/TSLA/tesla/price-sales

And let's not forget how Musk has allegedly manipulated the stock since 2018. Remember his tweet about taking Tesla private?

 

I'm just saying ....

Edited by Captain Ron
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33 minutes ago, Captain Ron said:

Yes, however the primary argument was that shareholders were mislead on specifics of the deal

The vast majority approved a deal that everyone thought was based on unattainable milestones. Those milestones were achieved. Anyone holding shares over the timeframe the milestones were effected profited significantly. Someone that held 9 shares sued. What a world. 
 

 

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8 minutes ago, Anastasis said:

The vast majority approved a deal that everyone thought was based on unattainable milestones. Those milestones were achieved. Anyone holding shares over the timeframe the milestones were effected profited significantly. Someone that held 9 shares sued. What a world. 
 

 

And the court just said that 1 shareholder was right. 

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From your link, this hits hard:

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The principle which must control our decision is not in doubt. The constitutional provision invoked is the due process clause of the Fourteenth Amendment governing the states, as the due process clause invoked in the Adkins Case[3] governed Congress. In each case the violation alleged by those attacking minimum wage regulation for women is deprivation of freedom of contract. What is this freedom? The Constitution does not speak of freedom of contract. It speaks of liberty and prohibits the deprivation of liberty without due process of law. In prohibiting that deprivation, the Constitution does not recognize an absolute and uncontrollable liberty. Liberty in each of its phases has its history and connotation. But the liberty safeguarded is liberty in a social organization which requires the protection of law against the evils which menace the health, safety, morals, and welfare of the people. Liberty under the Constitution is thus necessarily subject to the restraints of due process, and regulation which is reasonable in relation to its subject and is adopted in the interests of the community is due process.

Edited by safe sex
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Elon Musk is (temporarily) no longer the richest person in the world after a Delaware judge struck down his $55 billion Tesla pay package for being excessive. Tesla’s board now must propose a new compensation plan for its CEO. Musk, who can appeal to the state’s Supreme Court, is worth a measly $154b without the package.
https://www.nytimes.com/2024/01/30/business/elon-musk-tesla-pay-package.html
 
Gotta be a kick in the ego!

Seems like a lot of mind-reading by the judge wrt Elon’s motivations. Who knows what he has planned for that $50B: this is a guy who exploded the EV market, sends rockets to space, and has plans for Mars. Not cheap endeavors.
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2 hours ago, Buzzrock said:


Seems like a lot of mind-reading by the judge wrt Elon’s motivations. Who knows what he has planned for that $50B: this is a guy who exploded the EV market, sends rockets to space, and has plans for Mars. Not cheap endeavors.

sounds like a lot of mind reading by you re: Elon's motivations.

if he was even sort of of serious about Mars he would have spent the money from his pocket (i know it wasn't the full $44b to be clear) to accelerate Space X even more instead of spending it on a vanity project that he pretty immediately ran into the ground.

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1 minute ago, chainsaw said:

Switching from Delaware to Texas probably costs a lot of money and probably saves you no money, but I'm not a finance guru

There are a lot of reasons that many large Texas-based enterprises are incorporated in Delaware instead of Texas.  Elon will ignore all of those reasons, because of his fee-fees and his ego.  Just a starter pack on why companies choose Delaware (there's a lot more):

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Have you ever wondered why so many companies incorporate in Delaware? Delaware has established a reputation around the world as the best and most business-friendly state in which to incorporate. Delaware's corporation laws and statues are used to model business laws in other states.

More than 65 percent of all Fortune 500 companies and more than half of all U.S. publicly-traded companies are incorporated in the state of Delaware, and more startups are incorporating in Delaware every day.

Benefits of Incorporating in Delaware:

Delaware Corporate Law

One of the main reasons why companies incorporate in Delaware is the legal and liability protection of established corporate laws. Delaware's well-established and business-friendly legal framework is designed to provide a clear and flexible environment for businesses to operate. These protections are simply incomparable to what is offered by any other state in the nation, which makes it the Incorporation Capital of the World.

The Delaware Court of Chancery is the oldest business court in America, uses judges instead of juries (which speeds up legal proceedings considerably) and maintains the most advanced and up-to-date case law, which corporate lawyers in Delaware rely on and refer to. With experienced judges who specialize in corporate law cases, Delaware companies can expect faster and more informed decisions on legal matters surrounding their businesses. With more predictable results Delaware LLCs and corporations owners/shareholders will have decreased liability and litigation.

Delaware Corporate Taxes

Another reason why companies incorporate in Delaware is the incomparable tax savings. Some of the key corporate tax benefits of incorporating in Delaware include:

- For companies operating outside of Delaware, there isn't any state income tax. This can save a lot of money for companies that are incorporated in Delaware, but not conducting business within its borders.

- There isn't an inheritance tax on stock held by non-Delaware residents. This means that if the owner of a Delaware company passes away, inherited stock won't be taxed if the owner lives outside of the Delaware.

- Delaware does not have a state sales tax on intangible personal property (such as royalty payments); and shares of stock owned by non-resident aliens are not subject to Delaware taxes.

In addition, Delaware corporations not operating in the state of Delaware do not need to acquire a business license in Delaware.

 

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Texas did just recently create its own business courts. Texas corporate law is already pretty close in substance to Delaware corporate law so I would expect that much of Delaware's caselaw will over time essentially be incorporated into Texas law by the business courts, though its judges are directly appointed by the governor so I'm sure Abbott can stack it with cronies who would give political favorites like Musk preferential treatment.

 

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1 hour ago, wildcat09 said:

though its judges are directly appointed by the governor so I'm sure Abbott can stack it with cronies who would give political favorites like Musk preferential treatment.

 

And you have definitely captured the chief reason to incorporate here: if you are the kind of person that Abbott will fellate and suck up to (they still won't love you, Greg - nobody will), then that's an advantage.  Because those courts are built to do one thing: be the governor's personal court, beholden to him and his orders.

Exactly the kind of authoritarian state that Elon supports and dreams of.  You know, Elon, that noted "free speech absolutist" who just so happens to support authoritarianism.

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14 hours ago, Anastasis said:

The vast majority approved a deal that everyone thought was based on unattainable milestones. Those milestones were achieved. Anyone holding shares over the timeframe the milestones were effected profited significantly. Someone that held 9 shares sued. What a world. 
 

 

You've said this a few times, but it isn't really true (or at least not entirely true). Certainly the shareholders thought this to be the case, because that is what they were told in the proxy. And I'm just guessing the street thought so as well, although I certainly haven't kept up with that. But, management's own internal projections showed multiple of the milestones being achieved (which they were, on time), and from an accounting perspective the Board determined several of the milestones to be in the 70% band of probability.   

All of that aside - and regardless of the "right" outcome - this case really came down to the entire fairness standard of judicial review (which to me (an M&A lawyer, not a litigator), seems to have been correctly applied). Once you are in that realm, it's tough to win, particularly with the bad facts Elon and the Board created.   

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21 minutes ago, Reynolds Woodcock said:

You've said this a few times, but it isn't really true (or at least not entirely true). Certainly the shareholders thought this to be the case, because that is what they were told in the proxy. And I'm just guessing the street thought so as well, although I certainly haven't kept up with that. But, management's own internal projections showed multiple of the milestones being achieved (which they were, on time), and from an accounting perspective the Board determined several of the milestones to be in the 70% band of probability.   

All of that aside - and regardless of the "right" outcome - this case really came down to the entire fairness standard of judicial review (which to me (an M&A lawyer, not a litigator), seems to have been correctly applied). Once you are in that realm, it's tough to win, particularly with the bad facts Elon and the Board created.   

I certainly haven’t looked at the boards projections, but I clearly remember the reactions on CNBC. Do you know the details of which milestones were determined to have a reasonable probability of hitting versus those that did not and how the comp would look under those different scenarios? 

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48 minutes ago, Anastasis said:

I certainly haven’t looked at the boards projections, but I clearly remember the reactions on CNBC. Do you know the details of which milestones were determined to have a reasonable probability of hitting versus those that did not and how the comp would look under those different scenarios? 

I only know what the opinion said (one example is below, which is projection-related (not accounting related)).

Spoiler

The one-year projections underlying the operating plan forecasted $27.4B in revenue and $4.3B in EBITDA by late 2018, and thus predicted achievement of three milestones in 2018 alone. The longer three-year projections underlying that plan reflected that by 2019 and 2020, Tesla would achieve seven and eleven operational milestones, respectively. The Proxy did not disclose this. 

. . . 

After Tesla issued the Proxy, but before the stockholder vote, Ahuja presented the Board with a three-year operating plan (the “March 2018 Projections”) . . . The March 2018 Projections were more pessimistic than previous projections but still predicted achievement of one revenue and two adjusted EBITDA milestones by March 31, 2019, and further two revenue and four adjusted EBITDA milestones by the end of 2020.442 As discussed below, Tesla would issue a supplemental disclosure with this information, but not until after the stockholder vote.

 

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6 hours ago, wild_turkey said:


It’s not Elon’s money either. It’s Tesla’s money, and if a person owns TSLA stock, they have skin in the game a might have a small problem with paying the CEO $55B, almost 10% of TSLA’s market cap.

without judgement on if he is worth it or if it’s “fair”


They didn’t pay him cash.  They issued him the potential to earn options to buy shares of the company with the incentive for him to grow the companies valuation.  Further he can’t liquidate those shares and get 55B, it’s unknown how much less, probably significant if he was selling quickly.

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Swisher and Galloway discuss the Elon compensation package lawsuit today on their show. Highly recommended, you can find it around 15:40 on the above podcast.

The gist of their points is really this: The board is supposed to be fiduciaries of Tesla, not Elon's rubber stamp machine. The issue isn't the compensation, but the fact that they basically were doing what Elon wanted and acted in his best interests, not Tesla's. And the result was losing this case.

When you take that, combined with the fact that in getting support of over 70% of shareholders to support the deal, the board had to misrepresent their role in negotiations (IE they lied to shareholders), it really became easy for the court to strike down his compensation.

Other people that understand this more than I do have noted that for the court to do this, and people can't readily find another case of them striking down CEO pay, they had to really find something bad - in the ruling, the court states:

Quote

The Compensation Committee and Musk were not on different sides. They did not acknowledge the existence of a conflict. It was a cooperative and collaborative process.

Basically, who brought this case, and the milestones used to set Musk's pay (which I have seen argued were not as unattainable as shareholders were lead to believe) don't mater - what matters is how tied together the board and Musk were and in this case - way too tight.

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12 minutes ago, Captain Ron said:

Swisher and Galloway discuss the Elon compensation package lawsuit today on their show. Highly recommended, you can find it around 15:40 on the above podcast.

The gist of their points is really this: The board is supposed to be fiduciaries of Tesla, not Elon's rubber stamp machine. The issue isn't the compensation, but the fact that they basically were doing what Elon wanted and acted in his best interests, not Tesla's. And the result was losing this case.

When you take that, combined with the fact that in getting support of over 70% of shareholders to support the deal, the board had to misrepresent their role in negotiations (IE they lied to shareholders), it really became easy for the court to strike down his compensation.

Other people that understand this more than I do have noted that for the court to do this, and people can't readily find another case of them striking down CEO pay, they had to really find something bad - in the ruling, the court states:

Basically, who brought this case, and the milestones used to set Musk's pay (which I have seen argued were not as unattainable as shareholders were lead to believe) don't mater - what matters is how tied together the board and Musk were and in this case - way too tight.

One thing is for sure, this case is going to make a shit ton of money for law firms (thanks!), because this ruling is red fucking meat for the plaintiff’s bar. 

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Your new Tesla Cybertruck’s cool wheel covers will shred tire sidewalls.  Better just take them off.

https://jalopnik.com/tesla-cybertruck-s-aero-wheel-covers-are-chewing-up-the-1851218721 

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The YouTube channel for Tesla upgrade and accessory brand T Sportline investigated this phenomenon, and found significant sidewall damage on the tires of a Cybertruck that only has “a couple thousand miles on it” according to the host Brian Reese. Most of the aero wheel cover is made of plastic, but the ends of the spokes that extend over the tire sidewall are made of a rubberized material, so at least it’s not a hard plastic part that’s scraping away at the sidewall — but even rubberizing these wheel cover extensions doesn’t prevent damage. It’s honestly shocking that this defect was not identified in pre-production vehicle testing, but Tesla is known to utilize its customers as beta testers.

 

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25 minutes ago, Chopper said:

Yes and he's a stupid fucking cow for not understanding the basic premise that "legal status" is not the same as citizenship.

image.png.7b5b091905594557047d85e4ef1f14cc.png

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It’s the first step!

 

somehow he doesn’t seem to see or acknowledge the very documented instances of one side using state law to suppress the votes of the other side in order to, ya know, create a permanent majority- a one party state. 

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2 minutes ago, Pato del Muerto said:

It’s the first step!

 

somehow he doesn’t seem to see or acknowledge the very documented instances of one side using state law to suppress the votes of the other side in order to, ya know, create a permanent majority- a one party state. 

Its only cheating when the other side does it. 

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4 hours ago, Chopper said:

Yes and he's a stupid fucking cow for not understanding the basic premise that "legal status" is not the same as citizenship.

image.png.7b5b091905594557047d85e4ef1f14cc.png

image.png.6322c505ae709cd313a132bf661677ab.png

BILLIONS of non citizens already vote. Duh 

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4 hours ago, Chopper said:

Yes and he's a stupid fucking cow for not understanding the basic premise that "legal status" is not the same as citizenship.

He still doesn’t understand something as basic as the First Amendment, even though he’s owned Twitter for over a year now.  He still doesn’t seem to  understand what the customer and the product are when it comes to social media.

Then again, the fact that it’s still Twitter should speak volumes about everything he does.

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Another day, another Tesla recall of basically their entire fleet of cars. 

https://www.nytimes.com/2024/02/02/business/tesla-recall-us-vehicles.html

Quote

Tesla is recalling about 2.2 million vehicles because the font on the warning lights panel was too small to comply with safety standards, U.S. regulators said on Friday.

What’s amazing is that this isn’t they got something wrong, but they didn’t follow the rules that govern vehicles. 

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9 hours ago, Chopper said:

Yes and he's a stupid fucking cow for not understanding the basic premise that "legal status" is not the same as citizenship.

image.png.7b5b091905594557047d85e4ef1f14cc.png

image.png.6322c505ae709cd313a132bf661677ab.png

 

4 hours ago, atomheartbevo said:

He still doesn’t understand something as basic as the First Amendment, even though he’s owned Twitter for over a year now.  He still doesn’t seem to  understand what the customer and the product are when it comes to social media.

Then again, the fact that it’s still Twitter should speak volumes about everything he does.

Hes being obtuse. And yes Andy, it is deliberate. 

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3 hours ago, Captain Ron said:

Another day, another Tesla recall of basically their entire fleet of cars. 

https://www.nytimes.com/2024/02/02/business/tesla-recall-us-vehicles.html

What’s amazing is that this isn’t they got something wrong, but they didn’t follow the rules that govern vehicles. 

Large safety alerts don't look cool

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I'm thinking of floating a new conspiracy theory that Peter Thiel secretly persuaded Elon to be the first recipient of that brain implant and has been the marionettist behind the keyboard and strings making more and more outlandish statements in an effort to hasten his vision of a Middle Class Mordor. Can't quite figure out the grift angle though. Needs to be workshopped.

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On 2/2/2024 at 9:52 PM, Ted Lange said:


 

What a race-baiting fear monger. Only citizens can vote. Legal status means green card, which does not confer status. It's just a legal residency. Even if you say "but their kids will be citizens" - Biden won't be alive in 18+ years when those kids are first eligible to vote, much less running for anything. 

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