On the face, without reading the article, this looks like naked Judicial activism.
But reading the article, this is a legitimate lawsuit brought by a shareholder that makes a valid claim that there could have been collusion or other malfeasance to create this pay package.
Too much family and ties in the board.
It’s a debate how much Elon is responsible for the company now.
I’m a shareholder and I’m starting to question his value now days. He’s so focused on twitter and trolling.
CEO have to be careful with politics. He’s trying to sell cars and can distance customers
That article is better than the one I read yesterday.
I generally don’t like “sides with” language in judicial headlines anyway. It implies activism whether it’s there or not.
I first saw a post on twitter, so I decided to actually read up on it instead of just believing what somebody posted.
“The pay package granted stock option awards for approximately 304 million shares that Musk can buy at about $23.33 each, well below $191.59 where it closed on Tuesday. Musk earned all 12 tranches of stock option awards as Tesla hit escalating financial and operational goals.”
The fact that the stock soared 20 times in value is great for all equity holders. The options only work if the stock price goes up.
“Musk has not exercised any of the options and once he does he is required to hold the shares for five years before selling, according to McCormick.”
Musk must pay for the stocks at $23.33 each. Yes this is a great deal today because the stock price went up 20x. He is required to hold for 5 years. If the price plummets back down to $23.33 in 5 years, he will have lost money.
“Tesla’s value ballooned to briefly top $1 trillion in 2021 from $50 billion when the package was negotiated.”
Nice to get a 20x increase in stock. Below is a 5 year chart from yahoo. I don’t know when these options were granted but it was likely at or near the strike price to minimize taxable income for the options. The fact the underlying stock went crazy is good for all equity owners.
On the face it seems like the compensation is insane but if I were the judge, I would have let the man buy his options.
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I don’t think the ruling is due to the compensation being crazy, but that the compensation package may not have been negotiated in good faith.
A board is supposed to be impartial and do what is best for the company and shareholders.
That doesn’t mean maximizing profit as liberals claim. It means doing what is good for the company.
Shareholders voted on the package. Why were they not voting no in 2018? They are only outraged because the price went up so much. This is insane!
Yup. The stock price went up 20 fold, I don’t know what they’re complaining about.
A shareholder brought the lawsuit.
He claims that other shareholders (including Musk’s brother) were not independent and hid things from other shareholders in this negotiations.
Is this true? I don’t know, but this is a valid case.