I don't understand why everybody thinks this fee is outrageous. These lawyers just saved Tesla's shareholders way, way more than that. Pay $6 billion to get $50 billion? I'll do that deal all day long and twice on Sundays.
- Tesla finally settles with unions and starts treating their employees fairly.
- Tesla addresses the water pollution of their Gigafactories in Europe.
- Tesla signs that collective bargaining agreement in Sweden so they can finally sell cars there (and have their charging stations unblocked).
- Tesla adapts their marketing to stop claiming auto-pilot bs.
- Tesla adapts their quality control so Tesla cars are no longer delivered to customers in a semi-assembled state.
- Tesla starts investing in research for more sustainable disposal of batteries and alternative means of energy storage
I can see a lot of upsides to Musk leaving Tesla (on top of the $50B)
I mean, if you can afford to spend $100k just to simp for Elon Musk, god bless you, but the rest of us want $100k of value when we pay $100k for a car.
The point is that time will tell if this really saves money over the long run. I do not know the law and I am not questioning the board here.
If the board was representative of the shareholders wishes, the shareholders wouldn't have sued the board.
They want Elon compensated with the bonus he hit very difficult growth targets to earn because they want to make money from him further growing the company.
If they just donate the shares they personally bought, then they don’t make money. They lose it.
Those billions could have gone directly to shareholders as dividends, or reinvested in the company for future growth. Either of these would be better at making money for investors. I question the logic that giving it to Elon will motivate him any differently than a lesser, but still very generous compensation would have.
It is presumed here that money is what is driving Elon (or other already billionaires). This is only ever partially true. People like him also love the power of being in charge and notoriety. Those are likely worth more than the money for Elon in particular. The board and investors should, as is their fiduciary duty, pay the minimum needed to keep him doing what he's doing.
Not only that, but I think it's a real loss for the US in general and Deleware in particular as a good environment for business that respects property rights. Some guy with nine shares of stock overrode the wishes of over 3/4 of the shareholders and his lawyers may extract billions from the company which the market clearly sees as having been harmed by their actions.
Granted 56 billion is a lot.
This is _exactly_ the argument for Musk's case. The lawyer was hired (and managed) to convince the court this argument is wrong.
In other news, cheap EVs are entering the market so maybe it's a good opportunity for Elon to escape Tesla before it becomes a legacy brand name that some chinese maker will buy in a few years (like chevrolet or sth).
Is this true? Would there not be dilution?
Just because some people have astronomical returns doesn't mean everyone received the same.
Sure, the company would still be worth $10. But there are now 20 shares outstanding. Everybody except the guy who got 10 shares would see their shares fall in value from $1 to 50 cents.
Basically, issuing stock to one person has the effect, mutatis mutants, of transferring wealth from all the other shareholders to the person who got the new stock.
Any money or shares Tesla pays to Elon is money or shares that could instead be used to pay dividends to the shareholders or to buy back shares, which increases the value of all the shares that have not been bought back.
The dividends/buybacks are irrelevant. Anyone could sue to cut down dividends to increase buybacks or vice versa but thats besides the issue
The whole conversation about dilution is irrelevant: elon was granted stock options, there would be no issuance of new stock
...man if you really feel that way, can I interest you in some stock? I'm thinking about making a start-up...