Tesla, Musk double down on $56B payday appeal
- Reference: 1736443932
- News link: https://www.theregister.co.uk/2025/01/09/musk_appeal_tesla_pay/
- Source link:
In December, Judge Kathaleen McCormick failed to reverse her original decision to void the package, despite a move by shareholders to reinstate it in June last year.
McCormick, Chancellor of Delaware's Court of Chancery, said Tesla's request to overturn her earlier 2019 decision was fatally flawed, citing misrepresentations made to shareholders.
[1]
But this has not prevented Musk and colleagues from coming back for another try. Yesterday, they filed an appeal to the Supreme Court of the State of Delaware against the December Order and Final Judgment entered by McCormick, the January 30, 2024, post-trial opinion, a number of other related legal opinions and "all other rulings and interlocutory orders made appealable."
[2]
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They are also appealing against the judge's decision to award shareholders' counsel $345 million in fees in the derivative dispute.
The case originated in 2018, when Richard Tornetta, a Tesla shareholder, filed a lawsuit against Musk. The suit made it to a trial in late 2022, which ruled against the package citing disclosure failures and a conflicted board, among other considerations.
[4]
In April 2024, the Tesla [5]board asked shareholders to vote on the package . In June, Tesla board chair Robyn Denholm [6]wrote to investors in an attempt to get them to ratify CEO Elon Musk's sizable package, apparently concerned he might leave the Cybertruck maker.
[7]Judge again cans Musk's record-setting $56B Tesla package
[8]Tesla shareholders agree to pay Musk staggering sum of $48B
[9]Norway's sovereign wealth fund aims to zap Musk's monster Tesla pay deal
[10]Tesla chair begs investors to bless Musk's billions or face an Elon exodus
Later that month, [11]the shareholders duly agreed to the record-breaking pay package again.
However, in her December ruling, McCormick said: "A stockholder vote standing alone cannot ratify a conflicted-controller transaction." Her January ruling found Musk's pay package was invalid because he had too much control over Tesla and influence over the board.
"Even if a stockholder vote could have a ratifying effect, it could not do so here due to multiple, material misstatements in the proxy statement," McCormick said.
Meanwhile, Tesla sales have fallen for the first time in more than a decade. It delivered nearly 1.79 million vehicles in 2024, a decrease of about 1 percent compared to the previous year.
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An October [13]statement from the electric vehicle manufacturer said: "Despite sustained macroeconomic headwinds and others pulling back on EV investments, we remain focused on expanding our vehicle and energy product lineup, reducing costs, and making critical investments in AI projects and production capacity. We believe these efforts will allow us to capitalize on the ongoing transition in the transportation and energy sectors." ®
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[5] https://www.theregister.com/2024/04/17/tesla_reinstate_musk_pay/
[6] https://www.theregister.com/2024/06/07/tesla_board_musk_payout/
[7] https://www.theregister.com/2024/12/03/musks_tesla_pay_package/
[8] https://www.theregister.com/2024/06/14/tesla_shareholders_agree_musk_compo/
[9] https://www.theregister.com/2024/06/10/norway_wealth_fund_musk_tesla/
[10] https://www.theregister.com/2024/06/07/tesla_board_musk_payout/
[11] https://www.bbc.co.uk/news/articles/cleezyxjv4jo
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/cxo&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z4BVFh54Ytz0ztFCF7UQ2AAAAAk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.sec.gov/Archives/edgar/data/1318605/000162828024043432/exhibit.htm
[14] https://whitepapers.theregister.com/
Re : "It’s hard to tell isn’t it?"
No it isn't..... It's definitely the 'twat' option...
Or is it just a case of "I want what I want"?
"Well it’s that or the guy is a complete greedy fucking twat. It’s hard to tell isn’t it?"
Can we choose "all of the above"?
I can send him a dollar, if that would help…
Doesn't make sense
Why would the board not want him to leave? He's bringing the company down, people who want to buy electric cars don't want to buy them from a neo-Nazi.
Re: Doesn't make sense
Well that's easy, the board are his family and other sycophants. They get paid a sh&t ton to agree with everything he says.
If Musk leaves and a proper CEO is installed, they might try to reduce the amount of money going to the board and shareholders (of which the board members are as well). They would probably have to make statements (I.e the truth) which would cause the share price to drop to a more realistic level and the board members would lose out doubly.
We can't be having that now can we?
Re: Doesn't make sense
Because the board are all his accolytes, appointed by him. That's how he secured the ludicrous and unmerited pay award in the first place.
Re: Doesn't make sense
You might very well think that; I couldn't possibly comment
Re: Doesn't make sense
Nearly 50% of all investment in Tesla is retail - i.e. individuals. Most of them do so because they believe in Musk.
He may be bringing the company down (and failing to deliver on his many promises), but it is his vision that has brought in the majority of that investment. Without it, Tesla would be just another car company - and valued as such.
The board don't want Musk to go because it would tank the stock. Sales might increase, but not anywhere remotely near enough to justify the current stock price.
Tesla may not develop a new consumer car going forward - it's all AI, robotaxi and other unproven business ideas - but that is fine because so long as the investors believe in jam tomorrow it doesn't matter that the car side of the company has essentially ground to a halt.
Re: Doesn't make sense
Except that it does matter, eventually. And when that "eventually" arrives, it may coincide with the bursting of the broader AI bubble which would have some pretty wide consequences.
Re: Doesn't make sense
Eventually... sure.
But before then he, and most of the board and senior management will have extracted enough wealth to live extremely comfortable for the rest of their lives.
The smarter amongst them may also leave the company early enough to blame any eventual downfall on the people who replaced them, before moving on to the next company in the queue.
Re: Doesn't make sense
"The smarter amongst them may also leave the company early enough to blame any eventual downfall on the people who replaced them, before moving on to the next company in the queue."
It's not too hard to find lists of them already. One could have a well stocked parade with all of the execs that have left.
Re: Doesn't make sense
"The board don't want Musk to go because it would tank the stock. "
Maybe, but Elon has sold roughly half of his stock and the board/senior execs don't hold any stock they have once it's vested and they can sell it.
The last mainstream vehicle Tesla released was the Model Y in 2020. I consider those as a Model 3 that can't say no to a second helping of desert too often. They have 2 very similar mainstream vehicle offerings that are on the high end of the price scale for their segment. The S and X are luxury priced. The Cybertruck is just wrong on too many levels.
If the Semi was released in 2019 as promised, it might have had a chance, but it wasn't designed to appeal to the people that approve and buy trucks, logistics managers. They aren't a good fit for enough owner/operators who need range, a place to sleep and a traditional seating position. Now, just about every major brand has electric HGV's. Even Nikola has been shipping ET's.
As for autonomous taxis, I would put money on Geely before Tesla and a version of the London Black Cab. The design of the LBC is much better for a taxi. Aerodynamics aren't needed in a city, but easy access and room for prams, wheel chairs, bikes and scooters is mandatory. I still want a driver if I'm traveling. They know where to go, where not to go and can have a lot of local knowledge that's worth every penny of the fare sometimes. I'm still waiting to hear what the plans are for breakdowns. An autonomous taxi with no controls that freaks out and curls up into a ball can't be moved manually. Will cities need to purchase cranes to remove them? Will they just install really powerful winches on flat-bed tow trucks so they can be dragged up the ramp?
AI? Pffttt. Robots? for what? Your plastic pal that's fun to be around? I could buy a bunch of human friends for less $/£.
Re: Doesn't make sense
Is it remotely possible that Tesla is monstrously over priced as a result of the juice linked to Musk's cult following and his constant pump+dump evangelism ?
Re: Doesn't make sense
"Why would the board not want him to leave?"
They can't be seen wanting him to leave as the all owe Elon for their positions. If they waver in their support and Elon isn't ousted, the next time they show up, their employee ID card won't unlock the doors and their parking space will have poop emoji stenciled over their name.
What could be the motivation for continuing to fight the case?
Well, the UK's annual defence budget is a mere £53 billion, so given his recent animosity towards the country's politicians, I'd recommend checking the purchase records of any extinct volcanoes that have seen suspiciously large shipping activity recently, or perhaps getting Jodrell Bank to check for any new large geostationary space stations overlooking us.
Re: What could be the motivation for continuing to fight the case?
> new large geostationary space stations overlooking us.
When we learn how much reaction mass the StarLunk satellites really have, as they manoeuvre together and interlock their panels. The red Tesla reappears, having ejected the Starman to change its orbit; the steering wheel engages with the antenna controls and we learn just what a massively parallel phased array can do to a metal structure on Earth...
Because...
$400Billion is simply not enough to live on.
Sack Elongated Muskrat now. He's not pulling his weight at Tesla with him living at Mar-a-lardon.
musk doesn't deserve to exist
Though I sort of resent having to get out of bed so I'm not gonna do owt
Re: musk doesn't deserve to exist
It's interesting to note that, since so much of Tesla's value is tied to the hallucina^W visionary ideas of Elon Musk, his sudden untimely death would literally make billions for people shorting the stock.
Hiring a random Luigi would comparatively cost a negligible amount.
Not to worry. Now that he's buddies with Mein Fuhrer Drumpf , his blatant theft is sure to be approved by the courts.
"Judge Kathaleen McCormick failed to reverse her original decision..."
Is that some legalese? "Failed" implies, well, failure. She declined to reverse it, surely?
"What could be the motivation for continuing to fight the case?”
Well maybe he’s a bit short of cash!
You know attempting to influence the politics and governments of other countries, doesn’t come cheap, obviously the poor lamb is temporarily bereft of funds, and needs help.
Well it’s that or the guy is a complete greedy fucking twat. It’s hard to tell isn’t it?