Lawyers who voided Elon Musk's pay as excessive want $6B fee(ca.news.yahoo.com) |
Lawyers who voided Elon Musk's pay as excessive want $6B fee(ca.news.yahoo.com) |
> The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected.
How does it amount to embezzlement? I understand the SEC reward is for whistleblowing, but how is it whistleblowing if the information want publicly available via filings?
The plaintiffs law firms "funded it" by working for free, on a contingency basis: if plaintiffs win, the law firms get paid for their work. They won. Now they seek payment for their work.
- 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)
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.
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?
Not happening, of course. Modern legal systems have incentives to build barriers.
(For what it’s worth, I’ve never needed a lawyer and I’ve dealt with immigration in two countries and some basic legal stuff. Wasn’t a rocket science - the worst of it were all the unwritten rules. But of course, that was quite simple and straightforward stuff - surely, there are legal issues that are much more complex.)
I personally have had only positive experiences, but I've heard the horror stories. Beyond just the expected divorce stuff. Of course what matters are the circumstances.
A pattern emerges
There is no way a bunch of lawyers deserves that kind of payout.
You don't get what you deserve, you get what you negotiate.
...unless you're Musk who negotiated a deal with the company he leads only to have a few shysters insisting the deal is off while claiming 10% of the negotiated deal for themselves.
The board of Tesla did agree with the terms and conditions, probably because they thought the conditions would not be met.
In Germany, the issue is with real estate - about 1% of the price go to notary fees, which is many thousands of euros for most purchases. No matter what, this is outrageous.
How much she got is the same number, whether you measure it in dollars, euros, or pounds: 0.00
Of course, the comment might have been obvious trolling.
> Typical elements of the crime of embezzlement are the fraudulent conversion of the property of another person by the person who has lawful possession of the property.
You can read about the extent of the alleged fraud in the judgment, but it is clear that the board was nothing more than sycophants _not_ acting in the fiduciary interest of the shareholders.
https://courts.delaware.gov/Opinions/Download.aspx?id=359340
> The Proxy failed to disclose any of the Compensation Committee members’
> actual or potential conflicts with respect to Musk.747 In fact, the Proxy repeatedly
> described the members of the Compensation Committee as independent, stating:
> “The[] [Grant] discussions first took place among the members of the Compensation
> Committee . . . all of whom are independent directors;”748 and “[t]he independent
> members of the Board, led by the members of the Compensation Committee, spent
> more than six months designing [the Grant].”749 The Proxy’s introductory letter is
> “[f]rom the Independent Members of Tesla’s Board of Directors,” and the first four
> signatories are Compensation Committee members Gracias, Ehrenpreis, Denholm,
> and Buss.750 Notably, Gracias signed as “Lead Independent Director.”751
> The description of the Compensation Committee members as “independent”
> was decidedly untrue as to Gracias and proved untrue as to the remaining committee
> members.
Granted 56 billion is a lot.
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.
It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.
- Franklin D. Roosevelt
The idea that minimum wage was never a living wage and never meant to be is a rewriting of history.
// people who took years out of earnings to learn a new skill //
Here in Indiana, you have to have a Master's degree to be a teacher. Average wage is around $50k. Or you could get a B.S. in communications an and make 2-3x that doing P.R.
Or you could just drop out of high school to become a "creator" at only fans and make zillions a year taking pictures of your toes.
If you want a system which rewards years of learning new skills, this one ain't it.
* My wife was a teacher, my parents were teachers, my aunts and uncles were teachers, my grandparents were teachers, my kids are in school and I deal with their teachers. I’m sympathetic to the profession, and have also watched how those steering the ship head right for the iceberg while telling everyone warming them that they aren’t educators so they couldn’t possibly understand. I’m fine letting them lie in the bed they’ve made while getting paid a zillion times more being an IC at a company on one has ever heard of.
Well, I wouldn't go that far (cf. my example above on the pay differential between the oldest profession and the second-oldest profession) But it does at least set prices in a way which both buyer and seller agree on.
// they aren't educators, etc //
You have a way to let teachers make substantially larger wages? Let's hear it:-)
Alas, you wouldn't like a legal system which a layman could understand, any more than you'd like a computer which a layman could understand.
We are doing things, as a society and as a species, which take far longer than one individual lifetime to learn, so we divide up the work and specialize.
> so we divide up the work and specialize
There's an important key difference - no one is forcing anyone to understand how computers work in detail, and the situation where one needs this specialized knowledge is quite uncommon. Thus, this can be left to the specialists.
I do believe, though, that everyone should probably know how the computers work at the extremely high level, though. Because virtually everyone deals with computers those days, so this knowledge is nearly essential. And if someone wants to learn more for whatever reason - they should be more than welcome to do so, without any artificial barriers. No one should ever say "computers are really hard, only licensed engineers should be allowed to... (idk what)"
In the same way of logic, consider that everyone is a part of a legal and political systems, whenever they want it or not. Which is why I'd like to make those as accessible as reasonably possible, with the basics well comprehensible so you don't normally need a lawyer.
I think a better comparison could be with electricians, plumbers or builders. And with those, no one should need a specialist to do basic stuff (like replacing a light bulb or installing a bidet), and no one should be actively discouraged from learning more advanced things.
I'm saying this as someone who re-wired a fire hazard of an old house (with copper-aluminium twists from '40s, no grounding, and so on) up to a proper code (checked with a real electrician, of course), installed a water heater after old one had failed, replaced a car radio, etc. - just because I had time and desire to learn and do it myself (also saved some money). At the same time, I've happily went to a mechanic when there was something with the starter and I'm about to call a contractor for a simple leaky faucet, just because I don't have time for this.
Computers or anything else - I'm all for all the modern man-designed systems to be understandable and/or serviceable. So anyone with a working brain can do things themselves if they want it and have time for it, and no one is forced to hire anyone unless they prefer it that way (which is totally fine - like you've said, we divide work and specialize, optimizing our resources). Save the obvious exceptions where the risk of harming others is too high - e.g. the building codes are there for a good reason.
And I'd say some legal systems look way too unnecessarily complicated (or poorly designed) to me. And popular culture is complicit in re-enforcing this isn't helping - it's reinforcing the current status quo. Which seems to contradict the whole idea of resource optimization.
There is something very right about this, or the implication of this: Everybody, no matter how dumb or smart, rich or poor, educated or illiterate, is expected to comply with EVERY law, all day, everyday, 24/7, every minute of their lives. Whether they know about those laws or not.
So yeah, having a broadly understandable and accessible legal system is a necessity.
Nevertheless, at the rate we are inventing new algorithms (like LLMs), new financial techniques (like derivatives) and are going into new realms (like space), there are exponentially more opportunities for people to collaborate with each other--or, unfortunately--harm each other. So we need ever more laws. A few, simple laws just cannot give us all the protections we want, or create enough of a space for cooperation. There is an element of irreducible complexity.
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.
You know how I know that? Because they aren’t already doing that.
How many families could afford the salary of even one teacher?
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...
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.