From everything I've read and learned about this Musk comp drama, it has nothing to do with how much he's getting paid and everything to do with how they created the comp package.
The comp plan was presented as created by an independent board, when the truth was the directors had a direct conflict of interest that they did not disclose to the shareholders.
And that under Delaware law makes it a no-no and allows shareholders to sue, which they did. They were "mislead." Had they been more transparent, they could have given Musk triple the comp package and everything would have been above board.
The issue at the end of the day is transparency to shareholders, not the $ amount, or whether he did or did not earn it.
Which is why people are talking about moving companies out of Delaware.
Why would an executive want to work at a company if after he achieves amazing results, his compensation can Ben clawed back, due to a missing one sentence disclaimer on a proxy statement?
Uhhh, when the deal is for a $55bn package, an executive should pay a lawyer to make sure that that sentence is included, and ideally that it’s truthful if included. Delaware is the most shareholder friendly state for business and has so much clear precedence it makes operating a business easy. If you fail at that basic level of governance, it is either idiocy or malfeasance. Can’t have it both ways.
Also, nobody serious is talking about moving companies out of Delaware. Elon is tweeting about it.
Again the issue isn't compensation and whether it was too much, it's that the shareholders were mislead. If the board had disclosed they had a conflict of interest, and the shareholders still voted for the package (which I believe they still would have), it would be a moot point, but they did not. They didn't follow the rules, and that has consequences.
Laws and contracts aren't worth the paper they're written on if they're not enforced, and failure to follow the law, which they were all aware of, has consequences.
Im not suggesting that all rules should be removed. I'm suggesting that if the laws and rules exist to protect shareholders, the courts should take shareholders' expectations into account. None of us who owned TSLA in 2018 looked at the board of directors, which included Musk's brother, and assumed it was a totally independent board, regardless of disclosures.
I sold some of those TSLA shares and moved them into NVDA last year and I have zero expectation that the NVDA BoD is 100% free of undisclosed conflicts of interest.
If the Delaware court system does not care about my expectations, fine, but they shouldn't claim to be helping me.
> None of us who owned TSLA in 2018 looked at the board of directors, which included Musk's brother, and assumed it was a totally independent board, regardless of disclosures.
At least one person assumed it was independent, and that person sued. But if everyone knew about how conflicted the board is, how come the proxy went to such great lengths to refer to the board as "independent"?
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. At a minimum, Musk’s relationships with Ehrenpreis and Gracias gave rise to potential conflicts that should have been disclosed.752 Ultimately, all of the directors acted under a controlled mindset, calling into question the disclosure as to each of them.
Overall, Defendants failed to prove that the information about conflicts was adequately disclosed. The Proxy was materially deficient on this point.
The judge thinks the reason they did this was to fool people.
> I have zero expectation that the NVDA BoD is 100% free of undisclosed conflicts of interest.
It's not about mere "undisclosed conflicts", it's that the compensation committee was so conflicted that it was effectively controlled by Musk.
I find it ironic that you assume the person who owned 9 shares brought the suit actually felt harmed by the inappropriate use of the word independent and doesn't have some other undisclosed interest in regards to filing suit.
> the person who owned 9 shares brought the suit actually felt harmed
That's the rule of law for you! Nine shares have as many fundamental rights as nine billion.
This is why the cost of capital for Delaware companies is lower than others'; it rules out entire categories of screwing around. Here's the good news: nobody is saying Musk can't get $55bn. It's saying he can't get it while pretending he isn't a controlling shareholder. The best thing to do might not be appealing, but putting the package to a new vote and moving on.
I don't assume anything, the plaintiff argued exactly this in court and the judge found in their favor. If there's a suspicion that this person has some other undisclosed interest then that can be argued in court.
... I mean, misleading investors being a problem isn't an exclusively Delawarian problem. Delaware's key difference is that it has comparatively fast and efficient courts, so you might drag it out longer elsewhere, but in general, if you are a company, you should plan on avoiding lying to shareholders.
Realistically, if a jurisdiction allowed the blatant ripping off of shareholders, companies in that jurisdiction wouldn't be seen as investable, so most jurisdictions will avoid that. Would you invest in a company which has just moved out of Delaware for the purposes of avoiding the high quality of shareholder protection offered by Delaware? Like, that seems like asking for trouble.
> due to a missing one sentence disclaimer on a proxy statement?
Why would investors want to put money into a company that moved out of Delaware because they didn't want to have to properly disclose conflicts of interest?
It's wild to still be seeing random Elon tweets show up as serious comments. There are a number of reasons that so many companies incorporate in Delaware, and Elon having to follow some of the rules doesn't negate anything, despite him being cranky about it.
Go work a week as a landscaper and then let's talk about programmer salaries. Anyone sitting on their ass making over 100k a year is overpaid IMO. Unless you are curing caner lets be honest you are just making the next fart app and no you don't deserve more money than people breaking their back to make your garden look nice.
Unlike some other replies, I kind of agree with a sentiment (maybe because I did a fair amount of physical labor), but one very important thing to realize is that salaries are not about "what's worth what" and fairness but about supply and demand. Developers get paid more because their productivity allows that and not a lot of people can do what they do. While almost anyone can be a landscaper. And supply and demand in inflexible markets leads either to runaway high or deep bottom price.
Supply and demand is what gives people incentives to do and produce what is most needed and conserve things that are scarce, for the benefit of everyone. Anytime anyone tried to get rid of them completely it ended in poverty and misery, not a more just system.
Having said that, I sympathize with arguments to nudge things toward more just/equal outcomes recognizing supply&demand can be quite inhumane - after all it's a mechanism, not a goal in itself. Some UBI etc. could be an efficient way to help.
Having said that, western world spends huge amounts of money on public education for everyone, and after all that lots of people can't do anything fancier than tiding up a garden. It's a huge waste of resources. Future manual labor workers could start working after quick and efficient elementary schools, and start building wealth sooner to offset their lower productivity. But boy, no one is going to have conversations like that.
On all sides of all debates there's just bunch of irrational people trying to tweak a system that is too complex for them to understand.
It's not devs who are overpaid but everybody who is underpaid compared to the top. The current economy is a pyramid with honestly a lot of similarities with a ponzi scheme. I'm not saying outright that is one because I'm not sure myself but you could make a lot of parallels for sure.
You are much closer to these lower paid jobs than you realize.
This is like that exercise where people make a scale model of the solar system using a bowling ball for the Sun and a peppercorn for the Earth, and realize that, at that scale, the Earth is 77 feet away from the Sun, the Earth and Moon are only 2.5 inches apart, and Pluto is still half a mile away.
If you don't think people who are physically fit as a requirement to do their job can't think on their own, Well I got news for you once you assume people who generally sit all day and think can inherently have the physical requirement to do manual labor. Most programmers could not probably finish a real days labor job on their feet for 8 hours. They got a standing desk just to try 6 most of the time.
I respect landscaping as a profession but idk what reality you're in that you think a software engineer job is just being able to "think on your own" in a way that even 1% of landscapers can be plopped into it productively immediately.
Of course people who sit all day like many engineers will have problems doing manual labor. The problem is a good amount of them have enough experience with their hands to be a landscaper on demand. You will not find any but the most Einstein level landscapers able to immediately do productive software engineer work.
The % of people able to do it is much lower in software engineering and that reflects its compensation compared to landscaping.
You know how it's a meme that Tesla scores low on ESG, while Exxon or Shell or whatever scores high?
G for Governance covers this.
> What happened when the rating agencies looked at Tesla? Tesla has faced accusations of racism and poor working conditions, especially in the California plant. They looked at executive pay, they looked at their internal controls. And Tesla historically, has faced, you know, a lot of governance issues.
This is unironically also the perfect exit opportunity for Musk to exit Tesla at the top whilst still having the ability to raise capital from his fanboys for his next bets.
Simply say that he now does not have enough control over Tesla, so it doesn't make sense for him to keep running it.
But guess what? SpaceX is doing pretty well, so if Musk was 100% committed to SpaceX(and 100% committed to X, so 200% committed in total,) he could build a new Tesla from SpaceX.
Instead of promises of Tsla robots folding clothes he could now promise SpaceX robots mining asteroids.
Musk the worlds most hyped "capital allocator", a phrased increasingly parroted by billionaires and aspiring VC-bros as their raison d'etre to excuse bad behavior.
I bet he once was your hero and you praised him. Until you realized he had opinions you didn't share so now it's your part time job to make sure everyone knows exactly how much you hate him.
He always made gambles. But electric cars and space travel was cool, breaking up a safe space not so much apparently. I still remember the hipsters spinning their fidget spinners, swiping their iphones and discussing Musks latest endeavour like it was yesterday.
Granted I don't follow his every move so I'm out of the loop, but what objectively awful things has he done? I have plenty of opinions about many people, but none to the point we see some people hate Musk.
Edit: instead of downvoting, argue your points cowards.
1. “He admitted to his biographer that the reason the Hyperloop was announced—even though he had no intention of pursuing it—was to try to disrupt the California high-speed rail project”. (In hindsight Hyperloop looks like a sick joke.)
2. Buying SolarCity to save first-cousin, at loss to Tesla shareholder value and broken commitments to solar customers. Staged it as value-added move.
3. Taking-Tesla-Private impulsive outburst. Turned out to be untrue, billions in shareholder value lost overnight.
4. Full Self Driving ten years of promises and customers who prepaid not refunded.
5. Outright malice to innocents who challenged his ego. See British explorer pedo comment and trashing of that guy.
6. His son/his dad
7. Battery capacity hyping
More…
The pattern has to do with integrity and character as an example for such a wealthy and revered person.
To me all your points fall between normal business practices to biased misunderstandings. You claim he does "awful things" which explains why he gets more hate than other super rich. I'll give my views on each of them:
1. I did a search and looked into this, and it seems like a bad faith misrepresentation of what he said in his biography. I don't have a copy and am not going to invest too much time into a HN comment, but that's my take.
2: I need more knowledge on this to get a real opinion. Solar was all the rage and I'm not against companies investing laterally, even if there's nepotism. I would be more likely to invest in my friends than random people. CEOs make bad investments all the time, but I don't know enough to have an opinion if it was.
3. I didn't find anything about billions lost, only "Trading in Tesla shares was halted for more than 90 minutes, before resuming around 3:45 pm ET. They finished the day up 11 percent.", do you have more info? Who lost billions? Love the 420 reference, and he makes sound points. Being public is not always in the companies best interest. If he would have bought the shares above market price wouldn't that have been a fair deal?
4, 7. Show me more examples of optimistic estimates who get the same hate as Musk. Facebook/Meta for example, is Zuckerberg hated for the Metaverse not working out? No only ridiculed. In my book people are allowed to be wrong. He had better self-driving and more capacity than any competitor, you're just nit-picking for the sake of it.
5. Well, childish yes, but so was asking him to shove his sub up his ass. Don't start a fight you don't want to be involved in. Musk is eccentric and the response is in character, the fuck did he expect?
6. Elaborate, what about his son and dad?
Musk is an eccentric troll and people used to love him for it. The hate only started as soon as he endorsed Trump and bought Twitter. To me he's exactly the same Musk as always, in many ways I can relate. I don't have his fuck you capital but I also don't care what people think and can enjoy seeing people get pissed over bullshit reasons.
I don't think he's a bad person or does "awful things". Many times he makes total sense and has the balls to say what others should've years ago. That makes him dangerous to many people and they will find any means to take him down. That's how I see things, but I don't see people who disagree with me as evil.
Not the person you're replying to, but, you know, a lot of us have never been very impressed with him. The Muskovites are inclined to believe that everyone would be a cultist but for (reason), but this isn't necessarily the case.
(This is a common form of broken thinking for cults in general; the cultist is so convinced of The Truth that they assume that non-cultists must only be resisting The Truth for a specific reason, not realising that to non-cultists The Truth is just fundamentally disconnected from reality.)
I went from "ugh, this guy's pretty full-of-himself and bullshit-heavy" to "this guy's a loony" with the diver incident, but I was never particularly impressed with him beforehand. Like, even if he wasn't an unpleasant bigot, he still wouldn't be somebody that I'd be very keen on.
Whether you acknowledge it or not, in the journey of human progress, some individuals have played roles far greater than others. If our goal is to advance the progress of humanity as a whole, then rewarding these individuals is usually justified. Personally, I believe that Musk is greater than Buffett.
The comp plan was presented as created by an independent board, when the truth was the directors had a direct conflict of interest that they did not disclose to the shareholders.
And that under Delaware law makes it a no-no and allows shareholders to sue, which they did. They were "mislead." Had they been more transparent, they could have given Musk triple the comp package and everything would have been above board.
The issue at the end of the day is transparency to shareholders, not the $ amount, or whether he did or did not earn it.