Tesla putting Musk pay package up for another vote after judge voided first one | Hacker News Reader

Tesla putting Musk pay package up for another vote after judge voided first one

theverge.com

14 pointsrntn10 comments

How on Earth can the board justify that level of compensation now? They just laid off >10% of their staff.

Not that I agree with the justification, but I believe it is this: because Musk is involved in multiple companies, their choice is give him the amount he wants or accept that he'll be less motivated/interested in spending time on Tesla as opposed to the other companies, and that it would be a big enough negative to make this huge pay deal a better choice.

I believe I read a couple of months back that this line of thinking even came out of Musk's mouth, but I'm not 100% sure if he said it or others did.

Personally I think Tesla would be fine even if he quit completely, yet alone just spent less time on it, but if you believe that the difference between Musk caring about Tesla vs. not would lead to a difference of hundreds of billions of shareholder value, and you believe that without giving him then 50 billion dollars he will lose interest in Tesla, then it would be a logical business decision.

There’s no guarantee that giving him $50 billion won’t still end up in him losing interest anyhow. This approach seems like giving a hostage taker a ransom.

No but there's also no guarantee that anyone you pay a salary to will continue to do a good job, in both cases it's a judgement call of whether the risk is worth it. I personally think anyone earning that much is obscene, and that Musk isn't useful to Tesla any more, but my opinion doesn't disprove their judgement that it's worth paying him.

Because this was agreed upon a long time ago with certain conditions being met.

He met those conditions.

It's that simple.

If we start playing loose with the rules you will demotivate all sorts of high dollar investments in American tech.

Like it or not, this is how the system works.

It was agreed upon by a BoD made up of his friends and/or people he effectively controls. The BoD is not independent - which it should be. That is playing loose with the system rules.

Well, no, he didn't meet those conditions according to the court of Delaware. And now he wants to flaunt this ruling by trying again and re-incorporating in Texas.

That is not what the court said.

It said that the board did not explain the conditions correctly to the shareholders. Hence, they will provide shareholders with a full explanation of what the conditions were back in 2018 before this new vote.

^^ Original vote and the new one is by the shareholders.

This package also has a high risk of being voided in a few years. The core argument at the moment was that Musk's power and influence on the board was too strong which allows him to set his own pay to whatever level he wants to do. And this situation hasn't changed. Half of its members are the one when it agreed on the controversial 2018 pay package. New members are not that different as well. Elon still effectively has a full control on the board and this will be questioned.

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