Dr. David P. Weber’s Post

You're not going to believe what just happened with Elon Musk's insane $56 billion pay package. Despite Tesla shareholders approving it, a Delaware judge shut it down—again. The court isn't buying Musk's attempts to overturn the decision post-trial. It's a bold rejection of one of the largest CEO compensation plans in history. Musk warned he might jump ship if it didn't pass, but the judge didn't flinch. The ruling slams the lack of proper procedure and evidence in Musk's claims. It's a rare instance of corporate governance actually checking executive excess. The question is—what will this mean for Tesla's future, and Musk's role at the helm? One thing's certain: the visionary CEO won't be padding his pockets without a fight. #ElonMuskPayPackage #CorporateAccountability #TeslaShareholders #JamieBykovBrett #BykovBrettEnterprises

What does Elon Musk’s $56 billion compensation mean for investors? Many have an opinion on the saga but not many have all the facts. 1. The pay package currently in contention was approved by 73% of shareholders back in 2018. This compensation would only be paid upon share price and operational milestones being achieved. 2. According to the company, Musk received zero compensation in the 6 years since the 2018 compensation plan was approved. 3. The milestones have now been met. For one, the market value of the company has increased $735 billion between 21 Mar 2018 and 31 Dec 2023. According to the agreement, Musk has met his targets and is due his compensation. 4. In 2024, a shareholder sued in Delaware court, where Tesla is incorporated, to void the compensation package. The judge ruled against the package, deciding it was excessive and unfair to Tesla shareholders. 5. Hence, Tesla is bringing the vote to shareholders to re-approve the 2018 pay package. However, this alone would unlikely be sufficient, given the Delaware court’s ruling. At the same time, Tesla is asking shareholders to vote to re-incorporate the company in Texas, where laws would presumably be more corporate-friendly and would not prove an obstacle to ratifying Musk’s pay package. Based on the $735 billion value created for shareholders, it is debatable whether Musk’s $56 billion compensation -- 7.6% of the value created -- is excessive. However, I don’t believe that should be the main issue now. The debate about excessive compensation should have taken place in 2018 when the vote was brought to shareholders. Back then, 73% of the shareholders thought the compensation was fair if Musk could create a larger value for them. He delivered. I believe shareholders have to live up to their end of the bargain. Interestingly, the lawyers who brought the case against Tesla for excessive and unfair compensation are now claiming $6 billion in Tesla shares as their legal fee. What are your thoughts on Musk’s compensation saga? I’d love to hear them! Photo of a Tesla Cybertruck and me in the beautiful streets of Edinburgh.

It's baaaack — Tesla is taking another run at getting shareholder approval of that $2.3 billion option award it gave Elon Musk in 2018, that ultimately swelled to more than $50 billion. The bit that surprised me most: Tesla says doing so will stick it to the attorneys that won the case. Come for the preliminary proxy, stay for the legal maneuvering... As you'll recall, a Delaware court threw Musk's 2018 pay out on the grounds that the board wasn't independent enough and its approval process was flawed. Now Tesla is trying again, with a vote at its annual meeting. Here's that unusual argument: Tesla says that the lawyers who won the case are asking for big legal fees, on the grounds that rescinding the pay package is a big savings for Tesla. But now Tesla is saying that, if shareholders re-adopt the option package, Musk and other directors (the defendants in the case) can argue the lawsuit didn't help Tesla much after all, and so "any award of attorneys’ fees — if there is any — should be significantly smaller". https://lnkd.in/eHMfyRGh

https://lnkd.in/gJEiEpne Tesla’s $56 Billion Pay Package for Elon Musk Approved Amidst Controversy The recent annual shareholder meeting of Tesla in Austin, Texas, became the focal point of a significant decision regarding Elon Musk’s staggering $56 billion pay package. Here’s an extensive analysis of the unfolding events:

Elon Musk’s $56 Billion Pay Package Faces Legal Rejection Again >>>It’s official: Musk’s record-breaking pay package hit another wall. Here’s what happened: *🗳 The Delaware Court struck down Tesla’s attempt to revive Musk’s 2018 $56B stock-based compensation plan, citing undue influence and process flaws. *💼 Despite a shareholder vote supporting reinstatement, the court upheld its original rejection, calling the pay deal excessive and invalid. *📉 Tesla’s stock dipped 1.4% post-announcement, highlighting investor concerns. **What makes this case crucial? ⚖️ It puts corporate governance under the microscope, spotlighting how much control executives should have in shaping their pay. >> This isn’t the end, though. Tesla and Musk are set to appeal to the Delaware Supreme Court, with potential long-term implications for executive compensation worldwide. Is this about accountability or stifling innovation? >>>>> READ FULL ARTICLE HERE: https://lnkd.in/drDg5fPW <<<<< Share your thoughts 👇

Musk is demanding a 5% dilution of the 80% of of the outstanding stock that he does not own so that he can have a 25% stake to ‘control’ the direction of Tesla. I am a big fan of early Musk ‘first principles’ thinking, so you will understand why I find this current incentive demand of his to be illogical. First first-principle : hold and add to position to increase influence “Mr. Musk has sold more than $39 billion of Tesla shares since the stock's November 2021 peak” WSJ Second first-principle : “ acquire with retained earnings market shares to reduce dilution “ If Musk’s contributions had amasssed 46 billion in ‘earned value’ to the company, by all means the board could ‘pay’ Musk. Third first-principle: 50.000..1 is control of a company not 25% unless there are others in a coalition which seems to be the case here. Forth first-principle: The ‘Law of Coincidence’ makes it seem very unlikely that ‘wanting 46 billion from Tesla’ after spending 44 billion on Twitter’ are unrelated random events. Fifth and final first-principle for this post: Eli Goldratt’s Theory of Constraints is surely dominating Tesla these days and a good Jonah would likely out perform Musk as CEO. “The theory of constraints has three principles. These three principles are: convergence, consistency, and respect. The convergence principle implies that a complex system is simpler to manage because an adjustment or correction to one aspect of the system will impact the whole system.” Needless to say I voted against the pay package. We love our Tesla Y, love the supercharger network, love the virtuous cycle of packs and PV, love the employees we have interacted with. Elon needs the same risk to ‘loss of employment’ that he imposed in his layoffs of other humans. He should be given a reward package that is inline with the contribution of a single human and not the GDP of a small state.

Tesla Shareholders Approve Elon Musk's $56B Pay Package 💰 Despite opposition from some big investors, Tesla shareholders gave a thumbs up to CEO Elon Musk's massive $56 billion compensation plan. 👍 Key Points: 🔵 The pay package, approved in 2018, is the largest in US corporate history 🔵 It's tied to ambitious performance goals Musk has already met 🔵 Musk described himself as "pathologically optimistic" at Tesla's annual meeting 🔵 The vote underscores retail investors' strong support for the billionaire CEO While the approval is a win for Musk, it doesn't resolve an ongoing lawsuit challenging the package. 🚨 Some experts say the legal battle could drag on for months. Shareholders also: ✅ Approved moving Tesla's legal home to Texas ✅ Re-elected Musk's brother, Kimbal and James Murdoch to the board ✅ Increased investor control by shortening board terms and lowering voting requirements as Tesla faces slowing sales and Musk's divided attention, the vote signals shareholders want to keep him focused on his biggest wealth source. AXESecurities.com Revolutionize Your Trading Experience #Tesla #ElonMusk #PayPackage #Shareholders #EVs #Compensation #CorporateGovernance #TechNews

Tesla Asks Investors to Approve Musk’s $56 Billion Pay Again Tesla Inc. will ask shareholders to vote again on the same $56 billion compensation package for Chief Executive Officer Elon Musk that was voided by a Delaware court early this year. In its proxy filing issued Wednesday, Tesla also said it will call a vote on moving the company’s state of incorporation to Texas from Delaware. The carmaker will convene its annual meeting on June 13. Tesla Chair Robyn Denholm criticized the Delaware Chancery Court’s January decision, writing in the proxy that it amounted to second-guessing shareholders who had approved Musk’s performance-based award in 2018. Chief Judge Kathaleen St. J. McCormick described the company’s directors as “supine servants of an overweening master” and said they hadn’t looked out for the best interests of investors. “Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value,” Denholm wrote to investors. The shareholder who sued Tesla over the CEO’s compensation criticized it as excessive and opaque. Musk, who runs six companies, said early this year he preferred to work on artificial intelligence and robotics products elsewhere unless he owns a 25% stake in Tesla. He currently owns about 13% of the company, according to data compiled by Bloomberg. Tesla shares fell 1% shortly after the start of regular trading. The stock has tumbled 37% this year as an expected slowdown has given way to a surprise drop in vehicle deliveries. Earlier this week, the company announced plans to cut global headcount by more than 10%, and two senior executives left. Tesla’s board formed a special committee this year consisting of director Kathleen Wilson-Thompson and a group of advisers to determine two things: whether it should remain incorporated in Delaware, and whether to call another shareholder referendum on Musk’s pay concurrently with a vote on a possible reincorporation in a different state. CLICK BELOW TO CONTINUE READING…

The Case Against Elon Musk’s $46 Billion Pay Deal Tesla’s board is asking shareholders to approve a substantial dilution of their stakes for no good reason Take another step back and the spectacle of Tesla’s board, led by Chairwoman Robyn Denholm, trying to whip up support for Musk’s pay only highlights the corporate-governance problem that led to the deal’s dismissal in court: the domination of Tesla’s board by the CEO it is supposed to oversee. Put another way, Musk runs Tesla like a family business. This isn’t always a bad thing: Family businesses have impressive stock-market records in developed markets, precisely because they have strong leaders with “skin in the game” like Musk. But corporate governance does exist for a reason, which is to protect minority shareholders from being exploited by powerful insiders. This seems like a case in point: Musk seemingly wants to take money from Tesla’s minorities to fund projects such as X and xAI. With Tesla’s board under Musk’s thumb, shareholders have nobody to look after their interests but themselves.

This week, on June 13th, shareholders (myself included) will vote on the pay package that Elon mush was awarded back in 2018. In my view, a contract is a contract, the pay package with ZERO SALARY AND NO CASH BONUS, was fair and square. What Elon Musk did with Tesla was one of the most extraordinary stories on our lifetime. Musk was able to create a supply chain, prove that EVs are not only cool but transformative. Self driving will change everything! On the other hand we have observed dozens of CEOs leveraging their balance sheets with debt (well, it was quite inexpensive before the Fed hikes that is true) to do buy backs. No unique strategies, just engineering share price increases is not something to applaud? No vision, no great mission, no major problem solving. Buy backs... Have they 10x? No way. A contract is a contract. 73% of shareholders approved. I do believe most of us will vote for it yet again. Delaware will no longer be the no brainer place of incorporation in America. Profound consequences. What a week! Are you voting? Please do. Elon is not perfect, nobody is, but if it was not for him EVs would not be what they are and we would not have a chance to decarbonize transportation. Go Elon!