I have been waiting on this for a while since I found out that majority of the board leaders are either family or people has other businesses with. I think Tesla about to take another hit https://t.co/Ldp8jBWiih
— Sweet Love 🪬 ✨ (@NotoriousNichie) January 30, 2024
Sooner or later, gravity comes for even the most skilled, uh, performer… Per CNN, “Judge strikes down Elon Musk’s massive, multi-billion-dollar pay package”:
A Delaware state court judge has thrown out the 2018 pay package that helped to make Tesla CEO Elon Musk one of the richest people in the world.
Delaware Chancery Court Chancellor Kathaleen McCormick, who oversaw the bench trial that concluded in November 2022, ruled Tuesday that Musk and the Tesla board “bore the burden of proving that the compensation plan was fair, and they failed to meet their burden.”
The 303 million split-adjusted stock options that Musk had received as part of the package are worth $51 billion today, when calculated using Tuesday’s closing price, less the modest exercise price of $23.34 a share.
The case was argued in Delaware, where Tesla and many other major US corporations are incorporated. While Musk did not have an immediate comment on the decision, he did tweet Tuesday, “Never incorporate your company in the state of Delaware.”
Attorneys for the shareholders who brought the suit had argued that the package of stock options was excessive and that the directors on Tesla’s board were not truly independent and were too close to Musk to protect shareholders’ interests…
Attorneys for Musk and the Tesla board argued the pay package was approved by a shareholder vote. Excluding the votes owned by Musk and his brother, 73% of the shares voting in that election supported the pay package.
The Tesla attorneys also argued that Musk, who does not receive a cash salary or bonus, would be uncompensated if the package was thrown out.
But McCormick rejected the argument that Musk would be uncompensated if the package was thrown out, writing, “Musk’s preexisting equity stake provided him tens of billions of dollars for his efforts.” …
Tesla shares slide after judge voids Elon Musk's $56 billion compensation https://t.co/FJd3yAW6JK
— CNBC (@CNBC) January 30, 2024
Per the Associated Press:
… McCormick concluded that the only suitable remedy was for Musk’s compensation package to be rescinded. “In the final analysis, Musk launched a self-driving process, recalibrating the speed and direction along the way as he saw fit,” she wrote. “The process arrived at an unfair price. And through this litigation, the plaintiff requests a recall.”
Greg Varallo, a lead attorney for the shareholder plaintiff, praised McCormick’s decision to reverse the “absurdly outsized” Musk pay package.
“The fact that they lost this in Delaware court, it’s a jaw dropper,” said Wedbush Securities analyst Dan Ives. “It’s unprecedented, a ruling like this. I think going in investors thought it was just typical legal noise and nothing was going to come out about it. The fact that they went head to head with Tesla and Musk and the board and voided this, it’s a huge legal decision.”…
New: Tesla investor Ross Gerber, perhaps Elon Musk's most visible defender on TV, says he believes the Tesla story is "played out." Musk blocked him on X. Linda Yaccarino stayed in touch. Story on Musk's uphill climb to win 25% control of Tesla: https://t.co/AkPXnDCWD1
— Faiz Siddiqui (@faizsays) January 28, 2024
Backstory, from the Washington Post — “Elon Musk’s uphill battle to win greater control of Tesla” [gift link]:
Six years ago, Tesla outlined an ambitious compensation package for its chief executive that made Elon Musk one of the wealthiest men alive, and investors were all for it. Now, the world’s richest person’s desire for more control over the company is facing skepticism from those same quarters.
“Him asking for stock, the whole thing’s absurd,” Ross Gerber, a longtime investor and Musk ally, said in an interview, after issuing a stark conclusion: “I’m very grateful for the Tesla investment I made 10 years ago. We’ve reached a point as a firm, and me personally, where I feel the story is played out.”
While Gerber hasn’t pulled out of Tesla, he has tempered expectations about the company’s future — and become a vocal critic of Musk, one of the most vivid examples of mounting frustration with the entrepreneur regarded as brilliant but erratic. Since Musk this month requested a 25 percent stake in Tesla to avoid “a takeover by dubious interests,” investor patience has shown signs of wearing thin with the risks Musk has taken with his own fortune — and theirs. Gerber’s turning point was when he received outreach from hordes of Tesla investors seeking to pull out of the company after Musk fired off an antisemitic tweet in November.
A little more than a year ago, Musk sold billions in Tesla stock as he scrambled to finance his $44 billion purchase of Twitter, where he promptly gutted the social media company’s workforce, ditched the ubiquitous bird logo and rebranded it as X. Two months ago, advertisers began boycotting the platform after Musk put up the antisemitic post.
Amid that controversy, Musk launched a campaign to persuade Tesla shareholders to restore his stake in the company, saying his current 13-percent holding could leave him with “so little influence” as to be “essentially voted out” — making him reluctant to consolidate his artificial intelligence bets at Tesla. Musk’s vast empire includes a separate AI company called xAI.
His plea coincided with a devastating earnings report in which Tesla revealed that its revenue was stagnating in the face of steep price cuts that generated growth in sales volume. On top of that, the company forecast a potentially “notably lower growth rate” for 2024. The following day, Tesla’s stock plummeted by 12 percent, wiping out tens of billions of its value…
Meanwhile last week, Tesla investor Nell Minow, who serves as vice chair of ValueEdge Advisors, put out a note to clients — including large investors — questioning Musk’s request for a larger stake of the company that he hadn’t earned.
“I said it was somewhere between a 2-year-old tantrum and a gangster saying it would be too bad to have a brick thrown through your candy store window,” Minow said in an interview, likening Musk’s plea for more control to “extortion.”
“He is threatening to take away from the company something that already belongs to the shareholders,” she said. “He can’t do that any more than he can say, ‘I’m taking all the computers home with me.’”…
Gerber has regularly appeared on national television in support of Musk, but now he said the entrepreneur needed a dose of reality. Gerber lit into Musk publicly for putting Tesla at risk.
“It takes a lifetime to build a reputation, and a day to lose it,” Gerber wrote in one tweet, before lamenting that Musk “is not working on the mission at all!” and the “party seems to be ending” for Tesla investors.
Musk responded by blocking Gerber on the platform — an ironic move for “a guy who’s the champion of free speech,” Gerber said, calling it “essentially retaliation.”…
As I said months ago… the price wars are at Tesla to stay and @ElonMusk has no plan to win. He should have spent the last few years working on a $25k car instead of rage tweeting and building his adolescent dream tank. https://t.co/Z8bmedfB66
— Linette Lopez (@lopezlinette) January 25, 2024
“Tesla has lost more than $94 billion in market valuation in just the first two weeks of 2024.” https://t.co/Co66LOWGqf
— David Wallace-Wells (@dwallacewells) January 14, 2024
Early mover advantage gone forever. Bigoted narcissist at the helm. Brand reputation plummeting. Tesla will never regain this value. https://t.co/WgLuNzrQNV
— Tom Watson (@tomwatson) January 14, 2024
As opposed to their readers telling them??? What???? https://t.co/YBauyOamFr
— Ed Zitron (@edzitron) January 29, 2024
Mike in Pasadena
Hope you can sleep, AL.
Mike
sab
Yikes! LMAO. Delaware isn’t a friendly place to incorporate? What a failure
ETA Too bad we cannot undo all the damage he has done ramaging through things.
HumboldtBlue
Joe Biden wins.
Onan Soumy
In other totally-normal-people news, James O’Keefe says he has a ~new~ ~bombshell~ video out Wednesday that’s so big, he might be assassinated for it. So I guess we’re about to find out the truth about Elizabeth Warren and her marine boy-toy. Go cougers!
Balconesfault
Note how Greg Abbott rewarded Musk for bringing jobs to Texas with his gigafactory…
By signing legislation to add a $400 first year registration fee for electric vehicles in Texas, with a $200/year fee in subsequent years.
Musk targets those who want EVs to succeed, and gives bjs to those who want internal combustion engines to continue their dominance.
David 🏈 Mahomes! 🏈 Koch
The Taylor Effect
Noskilz
Hopefully Elon will have many more reversals of fortune in his future.
Halteclere
@Balconesfault: Texas, as with most states, rely on gas taxes to pay for roadway construction, improvements, and repair. So EVs are basically free riders, using roads without paying for them. And EVs damage roads more than comparatively sized ICE vehicles because on the greater EV weight.
So charging EVs an annual fee is Texas’ way to have EVs pay their share for use of the public roadway infrastructure.
NotMax
@Onan Soumy
“
Soylent GreenMy Pillow is people!”//
Anne Laurie
@Onan Soumy: James O’Keefe III (JOKe3) is a liar & a professional grifter, so he knows how to work the rubes into a frenzy before his next ‘big reveal’.
There is also a form of neurotic ‘you’ll miss me when I’m gone’ pathology where someone threatens suicide, sometimes going so far as to take a nonfatal dose of medication or commit a similar act of self-harm, to garner the attention of which they feel deprived. If such is what O’Keefe intends, may he f*ck this up as badly as he did his last attempt at Broadway-style choreography.
ColoradoGuy
I wonder if SpaceX will be the last man standing. Unlike the cars, the rockets are well-designed, reliable, and the most cost-effective on the market. And they have guaranteed customers, no small thing in the aerospace market.
The Boring Company is vaporware, so nothing there. And the Hyperloop is a literal pipe dream … the vacuum seal problem (entry/egress into the passenger capsules) is insoluble.
Chris T.
@Halteclere:
Each of those sentences is true, but the last one is quite misleading.
The “curb weight” is how much a vehicle weighs, sans passengers and cargo. The curb weight of a Tesla Model 3 runs from 3862 pounds (standard range, single motor) to 4048 pounds (AWD performance trim).
The curb weight of the popular Ford F150 ranges from 4275 pounds at the lightest to 5757 pounds at the heavy end.
Now, it’s true that a Toyota Camry, for instance, runs a “mere” 3310 to 3595 pounds, and Corollas are even lighter. But while an EV has some heavy-ish batteries, that’s not the main bulk of the weight anyway. The difference is mostly lost in the noise. In any case, even the heaviest passenger trucks do relatively little damage: most of the actual damage comes from heavy commercial vehicles.
Meanwhile, the average US driver drives somewhere between 12000 and 15000 miles per year. If the average gasoline mileage is 20 mpg (it isn’t, it varies wildly with the vehicle, but “20” makes calculations easy and isn’t absurdly far off the mark), that means the average driver buys no more than about 15000/20 = 1500/2 = 750 gallons of gasoline per year. The TX state tax rate is $.20/gallon, so that comes to $150/year. Texas’s own web site claims that Texans pay $9.52/mo or $114.24/year (see https://www.dot.state.tx.us/ttf2011/Presentations/GasTaxPlacemat.pdf).
So to be “fair” to EV drivers, Texas should charge no more than $115/year, not $200 plus another $200 up-front.
(WA state is doing the same silly thing, overcharging EV drivers. I don’t mind personally as I can afford these fees—and they’re way lower than CA’s property taxes were—but if we want to encourage EVs, we should not be charging higher road fees for them.)
NotMax
@Chris T.
There are EVs whose batteries all by themselves weigh more than a Corolla.
satby
As we transition off gas we need to fund roads another way than with gas taxes. How is a bit above my pay grade though.
Chris T.
@satby: My personal favorite, but maybe it only works in states with annual (mostly emissions) inspections, is that you pay based on distance traveled. Sure, sometimes that’s out-of-state, but it works out pretty well in the end anyway. We already have some pretty strict odometer laws most places, so if an inspection includes, e.g., a brake test as it does in Utah, they can just record the current mileage at the same time. You pass inspection, you pay the fee for the registration including miles traveled since last time.
If states like, they can even throw in a weight adjustment.
NotMax
@satby
With current tech not too much of a stretch to calculate by annual mileage, Older vehicles would have to have a secure unit installed but that’s a one time cost that should be borne by the state.
What Have The Romans Ever Done for Us?
@Chris T.: I think what’s happening here is that the gas tax in most states never gets adjusted for inflation so relative to in inflation the tax has been falling for decades. It’s possible States see higher fees for EVs an opportunity to restore highway funding to something approaching the “adjusted for inflation gas tax” without facing a huge amount of blowback.
I agree the goal should be to incentive EVs and raise the gas tax as a disincentive to driving ICE vehicles but raising the gas tax has been politically untenable for a long while. So they’re sticking it to EV owners to get some extra revenue for highway funding because it’s the path of least resistance.
Baud
@satby:
Roads? Where we’re going, we won’t need roads.
Baud
Via reddit. Haven’t checked to see if Adam covered this.
NotMax
@What Have The Romans Ever Done for Us?
As Hawaii has an excise tax rather than a sales tax we pay a 4% tax on any other taxes already included in the total at the pump.
Excise tax applies to everything (including food and rent), every step of the way*. Supplier/manufacturer collects the tax from what is paid by a wholesaler, for example, then the price paid by a retailer is taxed, and finally the consumer/customer pays the tax again at the point of purchase. Estimates are the 4% excise tax works out to be the equivalent of a 17% sales tax.
*Exempted are newspapers, prosthetic limbs and direct federal benefits.
lowtechcyclist
@Chris T.:
This. Regular passenger vehicles, even the heaviest ones, have barely any effect on a road that carries 18-wheelers.
But given the problems with Texas’ power grid, it might be a necessity for Abbott to discourage EVs in his state. ;-)
The Thin Black Duke
@Baud: What’s happening to Musk now at Tesla is a rerun of what happened years ago with PayPal. When Peter Thiel and company saw Musk’s ridiculous and unprofitable plans for the company down the road, they kicked him out. This time around though, the stockholders waited to long to realize that Phony Stark has no clothes.
Balconesfault
EVs also eliminate the negative externalities associated with tailpipe air emissions and high benzene air concentrations around filling stations, not to mention water pollution and roadway dangers from oil leaks.
Meanwhile, Texas often has such high wind generation at night that’s there’s too much for the grid, and turbines are idled. The industry is dealing with this by building battery storage, but proliferation of EVs creates a distributed storage that can be used in the future to stabilize the grid when demand threatens to outpace generation.
So at the same time the state is doling out $10 billion in taxpayer money to encourage more gas power plant construction to be able to meet peak demand … they’re disincentivizing another tool for managing our grid.
Bupalos
@Halteclere: now do the extra road fee on natural gas and oil for hauling around and dumping billions of gallons of toxic, radioactive fracking water. Then do the diesel recovery fee for respiratory disease. Then do the price for literally destroying the planet with fossil fuels generally.
Little odd to do only this particular math.
NotMax
@Bupalos
Oh that pesky cloud of death.Silent Night currently on Netflix.
//
AxelFoley
@Baud:
Well done, sir. Well done indeed.
Princess
I don’t know if Musk will but I googled Lowtax and I can’t believe I never heard of him before now.
Bupalos
@NotMax: there are ic engines that do too
The bolt weighs 500lbs more than a corolla.
Ken
@Baud: Possibly the most interesting thing is Forbes using the phrase “pro-Russia Republicans.”
OzarkHillbilly
@Princess: I’m not surprised in the least that I never heard of him before. Reading his Wiki page I can see no reason why I ever would have.
Probably because I am such a Luddite.
What Have the Romans Ever Done for Us?
@Bupalos: Every single one of those makes sense. The obvious “make them pay for destroying the planet” has been a perpetual non starter until the latest fee on methane emissions that was part of the IRA. The obvious solution is a carbon tax but for reasons I can’t explain everyone hates those despite the fact that they’re the path of lowest pain/least resistance to reducing carbon emissions. Even many to most of the people on this here liberal blog hate carbon taxes. One could imagine a revenue neutral tax that reduced income or payroll taxes by the amount collected in carbon taxes and that would leave a lot of people better off than they are now, but it doesn’t matter – when you talk about raising the price of gas people just freak out.
Kay
A lot of people contributed to the overvaluing of Tesla. Are any of them going to admit they got played by this guy?
Geminid
@Balconesfault: Regarding EV batteries stabilizing tbe grid: I think we’ll be seeing a lot of home batteries as well. These will get better and probably cheaper, in part because they can be heavier.
Bruce K in ATH-GR
I can’t stop thinking about how total ICE bans will affect places that don’t have and can’t really support the infrastructure that’s needed for full EV adoption. The case that keeps coming up in my mind is the Greek islands – rural, isolated (except for ferry boat traffic), unable to join larger electric grids, no physical room for extensive EV charging systems. The smaller islands are a perfect argument in favor of keeping hybrid ICE/EV cars and trucks on the roads, as far as I can see.
This past summer I saw a grand total of one electric car on the small island where I spent a couple of weeks. And I have no idea how they’d handle recharging it, unless they happened to have an extension cord longer than a football field. (Gridiron or association, your choice.)
Chief Oshkosh
@Halteclere: That’s what Texas (and other red states) claim and the extra wear on road.
Show me the data. And does it include data on the effects of supporting all of those super-heavy fuel tankers on the road? Especially surface roads? No? Hm.
OzarkHillbilly
@Bruce K in ATH-GR: There is an island off the coast of MA, iirc, that recently closed down their power station (diesel iirc) when they put up a windmill or 2. I have no idea how applicable that solution would be for the islands you speak of.
Bruce K in ATH-GR
@OzarkHillbilly: The islands have been putting up generator windmills in recent times, true, on isolated ridges and promontories and the like (the Aegean has pretty consistent high winds in the summers, so wind power is kind of a no-brainer), along with solar generators. But that’s only part of the problem – even with robust green energy generation, I can’t see a way to put together charging infrastructure that would handle even ten percent of the vehicle traffic I’ve seen in the tourist season.
Geminid
@Bruce K in ATH-GR: There may never be total ICE bans, for the reason you suggest. Also, ICE vehicles can burn carbon-neutral fuels.
Alternatively, hydrogen fuel cell vehicles may come into wider use next decade. They match up with ICE vehicles in many ways. Among others, Cummins, Hitachi and Bosch are investing a lot in hydrogen fuel cell propulsion systems.
H.E.Wolf
WA State has no income tax, so it collects revenue via property taxes, business excise taxes, sales taxes, etc. … including vehicle registration fees.
As you correctly point out, it’s a system that’s easier on higher-income residents and harder on lower-income and fixed-income residents.
Another Scott
@Bruce K in ATH-GR: I ass-u-me there will be solutions that won’t require ICEs (possibly except in exceptional circumstances). E.g. there will be tiny electric golf-cart like things that people can rent; electric buses; electric trams; etc. Several national parks here in the US limit private vehicles and have buses bring people in and out of the park.
Battery technology is continuing to get better pretty quickly, but mass production will take a while yet.
We (and our descendants) will figure it out. ;-)
Cheers,
Scott.
SFAW
@Onan Soumy:
O’Keefe will release that bombshell video, just as soon as Chief Editor Korir gets done “reviewing” it.
Manyakitty
@HumboldtBlue: fucking stop it already with the unmarked twitter links. JFC.
SFAW
@Chief Oshkosh:
What are you talking about? It’s not as if Texas has any petrol-focused business. EVERYONE knows that refining (for example) is dominated by the New England states, plus Oregon and the Upper Peninsula (MI).
SFAW
@OzarkHillbilly:
Really? They have Lud in Misery? I didn’t know.
As to “Lowtax,” even after reading his Wiki entry, I have close to zero idea who he was. And, amazingly enough, I don’t feel deprived because of it.
MattF
Note that McCormick was the judge who dealt with Musk in the Twitter purchase dispute, forcing Musk to go through with the purchase. To say she’s ‘highly respected’ is a gross understatement— she’s plainly got his number.
Bill Arnold
@Chris T.:
Yes. In particular, road damage is almost entirely due to trucks.
Fourth power law – The fourth power law (also known as the fourth power rule) states that the greater the axle load of a vehicle, the stress on the road caused by the motor vehicle increases in proportion to the fourth power of the axle load.
Heavy trucks are the main free-riders. They pay a lot more in fees, but not proportional to the road damage that they cause. We need them anyway, but it should be understood that such transport is subsidized.
(FWIW, the fourth power is a bit high; there are arguments (oh there are arguments) that it should be somewhere between 3 and 4.)
Roads that do not allow trucks last a lot longer.