Did you read the article or the ruling?
The judge provided a sensational quote: "Is the richest man on Earth overpaid?" - completely ignoring any business value that he has brought to Tesla, a key element in determining whether a compensation package is responsible from a fiduciary standpoint.
Nothing in the article convinces me that the ruling is just and that the judge was acting in the fiduciary interests of Tesla shareholders.
According to the ruling, Musk’s lawyers failed to argue causality during trial. The judge can’t credit Musk for what Musk himself doesn’t argue.
> Defendants finally argue from hindsight. They claim the Grant was fair because it worked: “Tesla thrived because of the 2018 Plan.” With this argument, Defendants ask the court to infer a direct causal relationship between the Grant and Tesla’s subsequent performance. But Defendants failed to prove that Musk’s less- than-full time efforts for Tesla were solely or directly responsible for Tesla’s recent growth, or that the Grant was solely or directly responsible for Musk’s efforts. This last argument is empty rhetoric, not evidence of fair price.
How they arrived at those numbers is nowhere near as relevant as coming to an agreement and meeting the targets.
It’s the complete opposite of all the situations where the CEO burns down the office tower and jumps out the window with a golden parachute.
Interesting observation. I wonder how we wound up at a place where all of the incentives are the exact opposite of what they should be.
That’s the crux of the whole lawsuit.
The judge found that the whole process of coming to an agreement in this case was Musk talking to a mirror.
If there were an actual fair process here and it arrived at $55B then the judge wouldn’t have found as she did.
That’s why the shareholder lawsuit was successful.
Did you find the ruling? Everything I saw said it was approved by a large majority, and viewed as extremely ambitious goals at the time.
Both of these are addressed in the ruling [0]. The shareholder approval was effectively void due to material omissions, and it seems there's some dispute on how ambitious the goals actually were.
[0]: https://courts.delaware.gov/Opinions/Download.aspx?id=359340