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The Chancellor's Excellent Questions

46 点作者 nickcotter9 个月前

10 条评论

nejkbnek9 个月前
I think the Chancellor is getting at an important issue with simple yes&#x2F;no voting as a remedy for this kind of issue.<p>If, in 2018, Tesla had appointed a Special Committee on compensation which negotiated with Musk in an arms-length way they might have extracted a better deal. This deal would dilute minority shareholders less than the current 2018 deal while still retaining Musk as an executive.<p>Unfortunately because the original negotiation was not done correctly the only options for shareholders now are &quot;ratify the original deal&quot; or &quot;lose Musk as an executive&quot;. It&#x27;s pretty clear to the shareholders that Musk deserves _some_ compensation, and that he&#x27;s likely to torpedo Tesla if he doesn&#x27;t get it. But there&#x27;s no mechanism to remedy the original defect in the compensation plan, which is that the Board didn&#x27;t actually negotiate on behalf of minority shareholders in good faith.<p>If the Tesla board was trying to be compliant and respect the rights of minority shareholders they would craft a new, MFW-compliant compensation package to retain Musk. Maybe that would look exactly like the old package, but the mechanism of negotiating the package matters. It also has tax implications for Musk to recieve a new grant versus the old grant being ratified, but honestly that&#x27;s his fault for not running the company properly in the first place.
ralferoo9 个月前
The truly staggering thing about this &quot;deal&quot;, IMHO, is that people were crazy enough to vote for it. Sure, you can argue a CEO deserves to be compensated for his work, but there has to be a limit on publicly owned companies. Various people have talked about the magnitude of the proposed payout, what&#x27;s usually overlooked is that the figure was about 10% of Tesla&#x27;s market cap. Effectively, Musk was trying to instigate a 10% tax on everybody&#x27;s ownership of the company. Not 10% of profits, not even 10% of revenue, but 10% of everything including illiquid assets. That&#x27;s just for one year&#x27;s compensation, presumably he also expected similar going forward too.<p>I cannot understand why any shareholder would vote for this devaluation of an asset. Not only did I vote against it, as soon as the vote passed and it&#x27;d somehow got a majority, I sold off all my directly owned shares. Sadly, I also own a lot indirectly through ETFs by virtue of TSLA being in S&amp;P 500.
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xivzgrev9 个月前
I have a lot of respect for great lawyers&#x2F;judges. While they&#x27;re saying what is essentially gibberish to me, and they&#x27;re asking &quot;open&#x27; questions, that build on the responses, all along they&#x27;re slowly backing their opponent further and further into a trap until a dramatic finish when all is revealed.<p>Example here<p>The Chancellor interrupted to ask whether he could cite any case that permitted common law ratification of “an adjudicated breach of the duty of loyalty.” Ross danced around the question, insisting that Defendants were not arguing that the vote changed the Court’s adjudication “with respect to conduct.” Blah blah blah, skip a bit...<p>“So,” asked the Chancellor, “this has never been done before?” After a bit more rhetorical contortion, Ross finally admitted that, “Yes,” this has never been done before.<p>Thus, with these questions, the Chancellor established that for her to rule in Defendants’ favor, her Court of Chancery, which is subordinate to the Delaware Supreme Court, would be placed in the position of establishing a completely new legal doctrine.<p>It&#x27;s like a brilliant magic trick, if you can follow along.
sva_9 个月前
Maybe the arguments are correct, but that&#x27;s some next-level ass kissing there
_vaporwave_9 个月前
I think it&#x27;s clear that this was not at all an &quot;arm&#x27;s length negotiation&quot; with an independent Special Committee but, at the same time, it&#x27;s not clear that any harm was done to Tesla shareholders.<p>Tesla traded up on the news that the pay package was re-approved by shareholders and the similar voting outcome (72% vs 73% originally) in light of all of this information seems to indicate that the shareholders genuinely want this to go through.
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nickcotter9 个月前
Subtitle: The August 2 Tornetta v. Musk hearing on &quot;ratification&quot; is one for the ages.
skywal_l9 个月前
ELI5 anyone?
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deafpolygon9 个月前
“An Historic Day”<p>Shouldn’t that be “A Historic Day”?
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diebeforei4859 个月前
It is honestly ridiculous that the judge thinks she knows better than the shareholders.<p>The original plan had some procedural defects, great. Levy a fine. But don&#x27;t infringe shareholder rights to determine compensation, and certainly don&#x27;t award billions to the guy with 9 shares.
h2odragon9 个月前
All the reasons listed why Elon shouldn&#x27;t be paid according to a contract he had before hand, that got re-ratified by shareholders, amount to &quot;the Law should work different for people we don&#x27;t like&quot;, no?
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