The Electric Vehicle (EV) discussion thread (Merged)

UncleTrvlingJim said
That pay package is just stupid, but I'm not sure I understand how one shareholder can hold it up and have the judge side with the shareholder. I mean I agree that the pay package is irrational - but I'm not sure why a judge has the right to rule that. Is the ruling that the compensation package was negotiated in an unethical or illegal manner?

Just for everyone’s benefit - Tesla is a publicly-traded corporation. The board, therefore, has a fiduciary duty to the shareholders and shareholders have a right of legal action called a derivative action wherein they can challenge action taken by the company as a violation of the fiduciary duty to the shareholders.

Here, Musk’s $55 BIlLION bonus was dramatically out of line with even the most lucrative bonuses paid by Fortune 500 companies (found to be 250x the median and 33x the next highest in terms of public companies). The court further found that the board didn’t even engage in proper negotiation over the bonus, and that key board members and company attorneys were hopelessly aligned with Musk’s interests and failed to carry their duty to shareholders.

And contrary to Musk’s comments, the shareholder derivative action for publicly held companies is available in every state on basically the same standard.

It’s a 200-page decision after a discovery period and trial. It’s hardly a judge just making an arbitrary call: https://courts.delaware.gov/Opinions/Download.aspx?id=359340