Wednesday, January 31, 2024

Musk’s Package

Elon Musk is getting a karma-comeuppance.

A Delaware judge on Tuesday ruled that Elon Musk’s generous 2018 compensation package, which helped make the tech entrepreneur the world’s richest person, was unfair and should be undone.

The $56 billion package, advanced by shareholders and Tesla’s board, entitled Musk to stock options in the company as it hit specific performance targets. Shareholders sued Musk, alleging the process that led to the package was improper.

The decision wasearlier reported by Chancery Daily, which tracks Delaware Chancery Court matters, on Threads.

Musk issued a stern reaction on X, the social media site he bought in 2022, when it was known as Twitter.

“Never incorporate your company in the state of Delaware,” he said.

The ruling comes at a particularly tense juncture for the Tesla CEO. He has asked for 25 percent control over the company — which went on to become the world’s most valuable automaker after the pay package was implemented — after he sold off billions worth of stock to help fund his $44 billion acquisition of Twitter. Investors, including some who were enthusiastic about the 2018 package, are skeptical of Musk’s request for additional control.

Meanwhile, Tesla reported disappointing quarterly financial results last week that stemmed from steep price cuts that increased sales volume but barely grew its revenue. One analyst described the investor call as a “train wreck.”

In her written opinion, Chancellor Kathaleen McCormick said that plaintiff Richard Tornetta was entitled to “rescission,” meaning the package should be undone.

I see a lot of Teslas here in South Florida; they’re very popular because the weather doesn’t change a lot and you can recharge them in your three-car McMansion garage in Pinecrest.  And from what I’ve heard from the people who own them, they like them.  But the guy who runs the company isn’t a car guy, and if he knew what the buyer really wanted, he’d be working on an affordable electric rather than a pickup truck that looks like a doorstop.

One bark on “Musk’s Package

  1. My niece owns one. Yes, you can set the horn to sound like a fart, but overall I’m completely underwhelmed by the car.

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