Elon Musk will move Tesla's incorporation to Texas following $56 billion ruling, tops...

midian182

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A hot potato: If there's one thing we know about Elon Musk, it's that he holds a grudge. Following a ruling by a judge in Delaware, where Tesla is incorporated, that voided his $56 billion compensation package this week, the billionaire has announced that Tesla is moving its state of incorporation to Texas. The announcement comes just as hundreds of CEOs voted Musk America's most overrated Chief Executive Officer.

Delaware Judge Kathaleen St J McCormick this week agreed with Tesla shareholder Richard Tornetta's lawsuit that claimed Tesla breached its fiduciary duty by unjustly enriching its CEO to the tune of $56 billion.

Musk's response to the decision came in the form of X/Twitter posts advising people never to incorporate companies in Delaware, opting for Nevada or Texas if "you prefer shareholders to decide matters."

Musk then posted a poll asking if Tesla should change its state of incorporation to Texas, home of the company's physical headquarters. After 1.1 million people participated, the final outcome was 87.1% in favor of the move.

Citing the poll's results, Musk later confirmed that Tesla would be immediately moving to hold a shareholder vote to transfer its state of incorporation to Texas.

Using polls to decide the outcome of important decisions isn't something new for Musk. He restored Donald Trump's account in 2022 based on one of these results. There was also the poll asking if he should step down as CEO of the platform, to which most people said yes – that was one of the times when he suggested a poll didn't go his way because of interference by bots.

Musk topped another poll recently, though he's unlikely to be happy about it. Fortune's survey of most admired companies includes a section in which hundreds of CEOs were asked to rank their peers in terms of who is most overrated and who doesn't get enough credit. Musk took the number one spot on the most-overrated CEO list for the second year in a row, gaining 399 votes. Disney boss Bob Iger, who Musk has a particular dislike of, came second with 302 votes.

In the most-underrated section, Microsoft boss Satya Nadella was number one with 274 votes. Nadella has topped this list for the last eight years.

Musk's ambitious promises of colonizing Mars and the launch of fully self-driving Teslas, which he previously said would arrive in 2016, have helped earn him the most-overrated title. The fact Tesla missed its earnings and revenue forecasts during the latest quarter and has seen its share price fall almost 25% over the last 12 months isn't helping his cause. Then there's X/Twitter, which was recently valued at 70% less than what Musk paid for it.

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A few facts the media's failed to report about this story.

1. This was a 10-year pay package, not a single year, or even four years.
2. Musk's salary for that 10-year period was zero dollars. He wouldn't receive a single penny, unless he doubled the company's value. In fact, he raised it by 1200% in just 3 years.
3. The judge based her ruling on faulty law: that while the pay package was legal, since Musk was "also a large shareholder", he would have devoted his best efforts to the company regardless of pay. Under corporate law, the relationship between a shareholder and executive is strictly incidental, and one should not affect the other. At any point in that 10-year period, Musk could have legally sold his Tesla stake, and then been a CEO with no interest in company performance, other than his compensation package.
 
A few facts the media's failed to report about this story.

1. This was a 10-year pay package, not a single year, or even four years.
2. Musk's salary for that 10-year period was zero dollars. He wouldn't receive a single penny, unless he doubled the company's value. In fact, he raised it by 1200% in just 3 years.
3. The judge based her ruling on faulty law: that while the pay package was legal, since Musk was "also a large shareholder", he would have devoted his best efforts to the company regardless of pay. Under corporate law, the relationship between a shareholder and executive is strictly incidental, and one should not affect the other. At any point in that 10-year period, Musk could have legally sold his Tesla stake, and then been a CEO with no interest in company performance, other than his compensation package.
The problem is how the contract was drafted, presented to the shareholders and voted. The real projected growth of the company was hidden and shareholders were lied to about how fast Musk would qualify for the maximum amount. This resulted in a package that is around six times larger than the "combined pay of the 200 highest-paid executives in 2021".
 
The problem is how the contract was drafted, presented to the shareholders and voted.
You're inventing tall tales. There was no problem -- except that Musk exceeded all imaginable goals for growth, and was thus compensated a historic amount.

The real projected growth of the company was hidden
No one -- I repeat -- no one on Planet Earth in 2018 projected, predicted, prognosticated, envisioned, or even dreamt that Tesla would be a trillion-dollar company in 2021.

and shareholders were lied to about how fast Musk would qualify for the maximum amount. This resulted in a package that is around six times larger than the "combined pay of the 200 highest-paid executives in 2021".
Which of those 200 executives -- or even all of them together -- made their shareholders a 1200% profit in 3 years?
 
You're inventing tall tales. There was no problem -- except that Musk exceeded all imaginable goals for growth, and was thus compensated a historic amount.


No one -- I repeat -- no one on Planet Earth in 2018 projected, predicted, prognosticated, envisioned, or even dreamt that Tesla would be a trillion-dollar company in 2021.


Which of those 200 executives -- or even all of them together -- made their shareholders a 1200% profit in 3 years?
The court obviously found problems. And it's not the first time that people high up were doing shading things.

"no one on Planet Earth in 2018 projected, predicted, prognosticated, envisioned, or even dreamt that Tesla would be a trillion-dollar company in 2021." - what? projections are made all the time. and if you have internal information, like Musk had, you can make them fairly accurate. the problem was that these projections were not shared with the investors and the judge clearly agreed on this point.
 
The court obviously found problems.
"Obviously" means you know of no problems, but you're zealously anxious to believe in them. The judge's actual "problem" was her flawed legal analysis that, because Musk was a shareholder himself, he didn't need a large pay package to incentivize him. For extra credit, can you name which legal principle this violates?

projections are made all the time. and if you have internal information, like Musk had, you can make them fairly accurate.
Lol, I actually laughed at loud at this. The projection wasn't for profits or revenue, but stock price growth ... something controlled entirely by stockholders. Tesla - like all other public corporations -- fully disclosed in 2018 the products they intended to build, the price they intended for charge, and the costs they incurred along the way. They also disclosed fully that their 10-year goal included 12 "tranches" of 100% growth each time. So what "inside information" did Musk have that wasn't disclosed?

(Hint: this is the point you stamp your foot and exclaim, 'there must have been something!')
 
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"Obviously" means you know of no problems, but you're zealously anxious to believe in them. The judge's actual "problem" was her flawed legal analysis that, because Musk was a shareholder himself, he didn't need a large pay package to incentivize him. For extra credit, can you name which legal principle this violates?


Lol, I actually laughed at loud at this. The projection wasn't for profits or revenue, but stock price growth ... something controlled entirely by stockholders. Tesla - like all other public corporations -- fully disclosed in 2018 the products they intended to build, the price they intended for charge, and the costs they incurred along the way. They also disclosed fully that their 10-year goal included 12 "tranches" of 100% growth each time. So what "inside information" did Musk have that wasn't disclosed?

(Hint: this is the point you stamp your foot and exclaim, 'there must have been something!')
For someone who supposedly dislikes snarky responses, you resort to snark frequently; I would not be surprised if its in every thread to which you post. Yet another in a long line of Do as I say, not as I do bullying.
 
So why did Musk form a "Delaware Corporation" in the first place? Here's a hint: https://www.forbes.com/advisor/business/incorporating-in-delaware/

Yet another in his long line of "Genius" decisions.

It will be interesting to see if the shareholders approve the move, and if they don't Musk does it anyway since he has a history of ignoring polls that don't go his way.

Musk thinks he can run and hide. I bet he keeps running for a long, long, long time. Elon, the only problem with running is that you cannot escape your worst enemy - yourself.

Paraphrasing Chogyam Trungpa: The only true battles warriors fight are those they fight with themselves.
 
A few facts the media's failed to report about this story.

1. This was a 10-year pay package, not a single year, or even four years.
2. Musk's salary for that 10-year period was zero dollars. He wouldn't receive a single penny, unless he doubled the company's value. In fact, he raised it by 1200% in just 3 years.
3. The judge based her ruling on faulty law: that while the pay package was legal, since Musk was "also a large shareholder", he would have devoted his best efforts to the company regardless of pay. Under corporate law, the relationship between a shareholder and executive is strictly incidental, and one should not affect the other. At any point in that 10-year period, Musk could have legally sold his Tesla stake, and then been a CEO with no interest in company performance, other than his compensation package.
Please explain how the richest person in the world is actually underpaid. Just another sip of Copium, then keep 'em comin'!
 
"Obviously" means you know of no problems, but you're zealously anxious to believe in them. The judge's actual "problem" was her flawed legal analysis that, because Musk was a shareholder himself, he didn't need a large pay package to incentivize him. For extra credit, can you name which legal principle this violates?


Lol, I actually laughed at loud at this. The projection wasn't for profits or revenue, but stock price growth ... something controlled entirely by stockholders. Tesla - like all other public corporations -- fully disclosed in 2018 the products they intended to build, the price they intended for charge, and the costs they incurred along the way. They also disclosed fully that their 10-year goal included 12 "tranches" of 100% growth each time. So what "inside information" did Musk have that wasn't disclosed?

(Hint: this is the point you stamp your foot and exclaim, 'there must have been something!')
Ah yes, another one who thinks that all judges are corrupt and that their decisions are to be ignored. Obviously. No wonder I could not make sense of why you are defending Musk so hard.

"The projection wasn't for profits or revenue, but stock price growth" - huh? since when were we talking about anything else? I only said projected growth in the context of stakeholders, I didn't mention anything about profits. and first you bombastically deny "projections" and now you don't? make up your mind. stakeholders were not given the full picture (info) and the judge agreed.

I think at this point it's useless for me to explain further. The higher-ups in Tesla were forced to return huge sums of money multiple times, but you seem to find that "normal" and that they were 'entitled" to that money because the company grew.

Enjoy defending billionaires o7
 
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"Obviously" means you know of no problems, but you're zealously anxious to believe in them. The judge's actual "problem" was her flawed legal analysis that, because Musk was a shareholder himself, he didn't need a large pay package to incentivize him. For extra credit, can you name which legal principle this violates?


Lol, I actually laughed at loud at this. The projection wasn't for profits or revenue, but stock price growth ... something controlled entirely by stockholders. Tesla - like all other public corporations -- fully disclosed in 2018 the products they intended to build, the price they intended for charge, and the costs they incurred along the way. They also disclosed fully that their 10-year goal included 12 "tranches" of 100% growth each time. So what "inside information" did Musk have that wasn't disclosed?

(Hint: this is the point you stamp your foot and exclaim, 'there must have been something!')
Present actual objective data instead of making unsubstantiated claims and being snarky.
 
Many businesses have been leaving the communist California.
This has nothing to do with California. This court case was in Delaware. Delaware has the most comprehensive, stable, and business friendly corporate laws in the country. That is why the vast majority of US corporations incorporate in Delaware and why the state literally has more corporations than people.
 
A few facts the media's failed to report about this story...

Which of those 200 executives -- or even all of them together -- made their shareholders a 1200% profit in 3 years?

You and the media also didn't mention that 56 billion compensation package is equal to about 7 year's worth of profits combined for Tesla, and Tesla doesn't even make a profit every year.

This huge growth in share values was primarily driven by new investment money, not by a traditional evaluation of profit ratios.

Lisa Su of AMD increased AMD's share values by over 1000% within a few years (about 2000% growth in 5-6 years timeframe and like 7000% growth since 2015-2016) and saved AMD from complete bankruptcy. And she increased AMD's shares by making and keeping AMD profitable, growing AMD's business and market share, and did it without relying mostly on new investment money.

Do you know what Lisa Su's compensation is? In 2022, she was paid 1.1 million in salary and about 29 million in stocks...total compensation of around 30 million. So that is 30 million a year for saving the company from complete bankruptcy and growing shares by well over 1000% since she took over (currently at 1700% increase since 2017 and about 7000% increase since 2015-2016).

That said, the issue over Musk's compensation package was about how it was not negotiated. It was supposed to be negotiated with the board with shareholder input but it wasnt negotiated at all as the board was controlled by Musk and did whatever he wanted. Musk even admitted it was himself negotiating against himself.

So the issue was not about whether or not he deserved the money.
 
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On the one hand, as a libertarian myself, I do feel like if Musk controls the board of the company, how is that anyone else's problem? They can choose to not be share holders.

On the other hand, publicly traded companies do have rules to follow. The judge didn't have some grudge, she determined the rules were not followed in this case. He did (technically) have the choice of keeping Tesla private (although, at that point, this wouldn't be a trillion dollar company.) Even high-paid CEOs get millions or 10s of millions of dollars, not billions, with stock or stock options to further incentivize doing what is good for the company (Musk already owns a huge amount of Tesla stock.)

(Side note: How does this drop Musk's fortune from about $200 billion to about $150 billion? There's certainly a lot more millionaires around if you get to add whatever pay you expect to get over the next 10 years into your current balance sheet. I mean, by that standard, someone who is on welfare and tapped out every month could say they have a $100,000 fortune.)
 
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This "judje" is found to be related to biden sponsor company that donated a lot of money to him. They are trying hard but soon will fail.
 
This "judje" is found to be related to biden sponsor company that donated a lot of money to him. They are trying hard but soon will fail.
A person is related to a company? What?

And even if the judge is connected to a company that donated money to Biden, if you want to play the guilt by association blame game, a lot of companies that donated to Biden also donated to Trump. Many people/companies who donated to Obama also donated to Bush too. Companies often donate to both parties.

Biden's green energy subsidies also has benefited and still benefits Musk's companies with billions in federal subsidies.

So your claim this is all a Biden conspiracy to harm Musk doesnt even make sense.
 
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