Musk is an actor like his mother, just he acts the role of a CEO. All the big money and assets are held in trusts by the Car tel - have you ever seen billions go to the family once they pass??
I love the irony of being interrupted from your carefully curated video, Patrick, to see an AI generated video of Elon Musk promoting a pump and dump crypto scam 😂 Would the real Elon Musk please stand up? 😅 (I'm sure a part of you is dying, Patrick, knowing that Google, one of the most powerful companies in the world, is riding on your popularity to grift your followers with the very crypto scams you uncover) 🤪
Except that it isn't the truth. The incentive package was universally viewed as insane and completely unachievable. All analysts thought Musk would work for free.
@@MattCasters But the cash bonus of $2 million (which was above the minimum wage) was paid to Nelson Peltz, not Elon Musk, so I don't see how you can claim it isn't the truth.
If you're talking about Steve Jobs, he took a dollar a year but received 90 million jet. I wonder what that be today and today's dollars. I'll take $1 a year if I can get a 90 million jet out of it.
Here are some numbers just to put 55.8 billion dollars into perspective: The cost of the Burj Khalifa, the tallest building in the world: ~1,5B You could buy more than 35 Burj Khalifas for Elon's compensation package. The GDP of Iceland: ~26B You could buy 2 years of Iceland's total economic output for Elon's compensation package. Nintendo's profits from all Mario games ever sold: ~45B. Elon's compensation package is bigger than 40+ years of profits from arguably the most iconic video game series in existence. The compensation package of Stephen Schwarzman, head of Blackstone and one of the highest paid CEOs in America: ~253M Stephen Schwarzman would have to work for over 200 years at his current income to reach the same level as Elon's compensation package.
@@emilesmithrowe8353 Good point. Probably should have used the 4.75B cost of the Large Hadron Collider, the biggest and most complex machine ever constructed, as a more fitting example
I don't get it. You can't build anything without cash, which stock options aren't. Games profits are revenues and GDP is irrelevant. I don't think you understand finance. Phillip.
I have to ask, did you spend a lot of time on niche forums in the late 90s/early 2000s? I haven’t seen, well, anyone do a signature at the end, who wasn’t spending a ton of time in forums back then, when people did that. A curious remnant of a time long past.
As a non US citizen I hope that I don't cause offence, but if a business is too loose for the USA, you've got a problem. In most countries around the world, Musk would still be in jail for his Tweet to go private.
@@hendrikd2113 Perhaps, the dozens if not hundreds of YT videos crediting him with the axial flux motor, (Elon just revealed and so forth) videos crediting him with BYD Blade Batteries, Sodium Ion Batteries, Sulfur Ion Batteries, and many many more tech advances he had nothing to do with.... makes me wonder who is behind all those videos. I've blocked most of those channels, one sneaks through now and again.
This bizarre trend of overpaying CEOs has essentially become circular (and nearly tautological) in its justification. A well paid CEO is well paid because CEOs at good companies should be paid well, so obviously if you're paying your CEO well it means you're a good company. That's how that works, right?
@@davidbrayshaw3529 Sure, but there are reasonable measurements you could propose for determining if a company is good, and bad measurements. And "how much money are your executives paid" is one of the absolute worst ways to determine if a company is good or not.
@@Mrinsecure that’s what we said in the 90s. Rage Against the Machine! Then people get older and make different choices. ….i think this has always been and always will be the game we play. Find a different path for yourself and leave the others to do their thing, is all you can do, I think 🤔
Once worked at a Logistics centre in UK that had a contract to distribute a US product that had a shelf life. The US managers of the company in the UK would change regularly after all falling into the quarterly reporting trap. The stuff was pushed out to retailers on sale or return to manage the reporting then a chunk would come back as it passed it's sell by date and the manager would be fired, rinse and repeat until they gave up on the UK market as unprofitable....
It's theft from the other shareholders. It's inflation of the shares. Not at all different to the Mafia skimming from retirement funds of the Teamsters. Investment funds, and index finds that hold stock are essentially ripped off when executives grant themselves massive pay and stock options. It's simply theft.
@@MrSomsoc Elon must not have the correct politics. Maybe he should be paid his share of the ultimate award and leave everyone else out of it. The lawyers can take 3 shares worth.
In response to people talking about LLCs in different states being like the "Switzerland of the US", neither Delaware nor Texas are anything close to offering the level of privacy that Switzerland was famous for. Nevada is better in this regard, but... at least for people who are living outside the US, arguably the best tax shelter product available in the world now is a South Dakota Trust with the addition of Wyoming LLCs as needed. South Dakota and Wyoming have conditions on these entities that keep the identity of the true owner of completely hidden, including not reporting information to foreign governments or even the IRS. If you want to get really crazy, there's some people out there that claim that setting up an LLC in the country of Nevis and operating it here in the US is even more powerful than even Wyoming, and you'd be shocked that this is even legal once you learn some of the benefits Nevis LLCs purportedly offer.
yeah ive read that recently. like 200 paygrades above my level lol. doesnt explain why companies still in ireland tho.. or why celebes still have tax havens offshore (panama papers etc.)
@@chillphil967Ireland is in the trading zone of the EU and has very low taxes in the EU. So for operations in the EU it's better to do it from Ireland than to do it from outside the EU. Offshore holdings are to hide wealth, but you can't operate a business from there because then it would be obvious who's behind it
@@chillphil967 Ireland is pretty simple. Lowest corporate tax rate if your structure your business just right (12.5%) in the EU. Combined with English speaking population, decent place to live for high skill immigrants and a good education system churning out graduates able to work in biotech and tech industries. Every international company needs an EU base and Ireland is a very good one.
"level of privacy that Switzerland was famous for" emphasis on WAS. And when it seized to be, that effectively meant it never was, as plenty of investors in Switzerland have been named in published papers.
@@JaviEngineerbut people shouldn't be so over his heel If they just say they like his vision then that's ok But they put him on a pedestal so high Like he is some Messiah who will save humankind When he is just a person who just had good vision to own stocks in a good company
@Asunnybeach like it or not, if it wasn't for Elon Musk, we wouldn't have the rise of electric cars and reusable rockets. Us investors WANT Musk to be compensated properly for the stock and business increases he was most certainly responsible for. We WANT him to stay on board to push the compact, semi, and so many other Tesla projects forward. As such, very simply, we'll vote for another lucrative package but preferably out of the reach of Biden in Delaware.
How the lawyers in this case get paid seems to give rise to perverse incentives too. Some enterprising lawyers might try to get some random shareholder (possibly by paying him) with 1 share to start a case just so that they can reap huge sums of money if they win.
@@tomlxyz The payout here is truly enormous, especially compared to the harm suffered by the guy with 9 shares. Considering that, many lawyers might want to try to litigate cases like this even if they think their chances of winning are small; the expected payout would still be large.
Musk's proposed compensation package is more than double the sum of all the profits that Tesla has ever made. In what universe does this make sense? Only if the principles of Hyperloopen Accounting Standards are applied can any sense be made of this ...
He 10x'd the stock, and this is just options. Mary Barra is slowly destroying GM, but unlike Musk her pay isn't tied to performance. This guy with 9 shares 10x'd his money. Because of Musk. Telsa wouldn't have 10x'd without him, and you're delusional if you think otherwise.
The pay plan was rescinded, not voided. There is an important legal difference. Recision allows the same pay plan to be put back in place, and also creates a bizarre legal ambiguity where you can’t go back in time, but the judgment acts like you can.
Tesla's board can, and likely will, issue a new comp package that "makes Elon whole", in addition to setting new targets with additional compensation or, as discussed on X, a second class of stock that provides Elon control without diluting shareholder value. And it's likely the shareholders would vote for such a plan. But you can't reinstate the package because it's not 2018 anymore, and thus the package as written in 2018 makes no sense.@@devintriantos
Based on accounting experts, Tesla board cannot retroactively redo the compensation plan because the tax consequences and total cash outlay would easily bankrupt Tesla!😂
And that also means that the lawyers are not entitled to $19B. Also, to what extent were these lawyers representing all shareholders? The benefits that these lawyers are entitled 1/3rd of, surely do not encompass the benefits to the company or shareholders, but to the benefit to the guy bringing the suit, and his 6 shares.
You are completely wrong here. This lawsuit is about the 2018 compensation package. Stock options were granted but never exercised. There has been no taxable event, and there wouldn't be if the pay plan was reinstated in its current state@@Agent77X
Wonderfully done - makes it very easy for anyone to follow along with what has been happening not only at Tesla, but generally across the Board. But especially at Tesla it’s gone completely bonkers.
I mean have you ever heard of asking for a raise or negotiating salaries? If people haven't then they should try. It helps you a lot in earning more money.
Gotta love the corporate culture where the captains of the ship are hugely rewarded for merely doing their jobs, while all the success of the company gets attributed to them. At the same time whenever a company is doing badly, its always someone else's fault and the supposed captains of the ship never take responsibility of anything, in fact they're often the first ones on the lifeboats when they ground their metaphorical ships on the rocks.
First thing companies do when they're in trouble is lay off employees. They even do it when times are good but growth is slow. You never hear anyone say "We had a bad quarter, time to cut costs by firing the CEO."
Your comment doesn't apply to Musk. He pulled this company out of the fire. It was the most shorted stock in history at the time and he 10x'd the stock price. You don't do that by merely "doing his job". He performed a miracle. And he should get what he was legally promised.
It’s incredible how we can watch your show and get such great detail and info on financial news stories and this channel is so much better than the newspaper or tv
And yet in such a detail he fails to explain how insanely difficult it was to meet the goals in that incentive package. Tell me how biased Patrick is without telling me he is.
@@BartekCelary me thinks you're one of those people that has a very loose grasp on what the word bias means, so they run around screaming "bIAs!!" as some sort of panacea for criticism. My guy, Elon has a 10% stake in the company and the board are a bunch of his closest friends. The "difficulty" had nothing to do with the legality of whether or not anyone is acting in their fiduciary duty. Elon already has every incentive in the world to prioritize Tesla's share price. From the perspective of a shareholder, the judge and anyone with a brain, he doesn't need an extra, unprecedented by orders of magnitude incentive package.
You think? Hqve you seen the state of the financial markets right now? He would have to buy out shareholders to do it, and he doesnt have that much cash. No collateral, no loan. If he takes it private, he would have to put up his shares and other assets as collateral to get the money. He can reincorporate in Texas, but it doesnt mean his problems would go away. He lacks credibility, especially as he and the board lied by omission, by not revealing the whole deal, which would devalue the value of their shares. He showed how much regard he has for his shareholders. And the smart ones will pay attention to that.
Musk is Tesla and this is Biden’s administration getting back at him for talking out against Biden, don’t kid yourself. Biden’s administration is like Nazi Germany, speak out and we will bankrupt you!
v funny. Elon a victim of his own sense of humor. The biggest joke of all is that it wasn't a joke at all. He was deadly serious. The Saudis just changed their mind.
Elon Musk hit with fraud suit after admitting to SEC he said Tesla would go private at $420 a share in 2018, because he thought his then pop star girlfriend Grimes would find it funny.
Would have been useful if you had presented the structure of Musk's pay package. Would've fit in nicely after the very interesting "history of CEO pay" part of the video.
This is the key point. The pay package was based on hitting incredible numbers. No one thought he would be able to, yet he did. Yet, the story seems to gloss over this fact. Including the judge. He 10x shareholder value. That's insane.
I don't think this clown understands how Elon's compensation was structured. Morons coming up with simple minded conclusions based on their shallow understanding of events. Typical youtube morons.
Tesla shareholders are like no other. Elon's $55b compensation package works out to the equivalent of $17 per share. Of course, Musk still owns about 176 million of those which means if dividends were paid to all shareholders out of Musk's renumeration package, he'd still be in for just under a $3 billion payday. But why would any shareholder want dividends when the CEO can take the lot? That's the way Tesla shareholders think. Rather than banking a $17,000 check based on the 1000 or so shares that they own, they'd rather give it away to their esteemed leader. But Tesla is not a cult. I want to make that clear. Tesla is not a cult.
I hope you're talking about the fact it was voided. Because Musk's pay was based on specific targets - growing Tesla to a $600bn valuation, which he managed to do. If he had failed in that his compensation would've been basically nothing. So he gambled and succeeded and now he's being punished for it. Thats disgusting.
@MA-go7ee Awww, poor billionaires. Why would you argue for somebody who considers you and everybody like you as utterly disgusting and would never associate with you? Arguing for billionaires will never make you one of them, it will make you into fresh meat ready to be metaphorically devoured by them, if they ever notice you at all. Unfair or not is irrelevant. You will never be one of them. You'll stay poor and angry. You're not a temporarily embarrassed millionaire, you're sitting in an eternal hamster wheel and will never reach your goal.
I follow some of these Tesla investors on RUclips. They are convinced that Robotaxi will revolutionize transportation and bring in huge profits to Tesla. They also believe the Tesla energy will bring in huge amounts of profit. And they also take Mars colonization seriously. They put ordinary cult followers to shame.
It's amazing how huge salaries and the status of running a big company aren't enough to motivate senior management. Seems to me senior management are in the wrong jobs and companies should find people who actually want to be in charge.
if i was the ceo and i made the value of the company go from 60bil to 600 bil, yes i do expect to be compensated at 10% of it. look at the lawyers they asking for 33% to win the case, is that fair compared to a ceo that raised the value of the company 10x? what did the lawyers actually do? ether ways, tesla without elon is nothing... elon is basically tesla, losing him for tesla would be similar to apple losing steve jobs the first time
@@songhan1586 I think you've fallen for the propaganda. Many people contribute to the growth of a company. I can point to things I have done that put large sums on the bottom line, but I have never been 'compensated' for it. If CEOs had to pay out equal sums when companies fail then high rewards might make some sense, but even during the banking crash CEOs walked away with pensions, salaries and bonuses intact. To add insult to injury, executives received bonuses simply for restoring the status quo or less. The bottom line is that executives pay themselves as much as they can get away with and pay other employees as little as they can get away with. Sad but true.
@@songhan1586 Its impossible for YOU to do that. It takes the efforts of 1000s of people to 10x a companies value. And they and the stockholders should all benefit from it in a big way.
@@johnnynephrite6147 But shareholders did benefit massively, the company valuation 10x, so did the employees who got paid in equity as well. Tesla minted many employee millionaires even from normal line workers
Agreed. The details on the nature of the Delaware Court of Chancery, and the historical logic of stock options with historical examples of how it went wrong was a great education. I also appreciated the focus that Patrick did on the nature of the ruling, ie, not so much about the amount, but the process of rubber stamping and failed disclosure as well as some of the counterargument that Judge McCormick provided in relation to Musk's time spent at Tesla.
Patrick has an obsessive hate of Elon. It's been going on for years. Patrick and Jake Broe are full of bile and lose all objectivity with their naked hate of the man. It's so sad. Phillip.
I remember when this pay package was created years ago that he could juice the stock enough to trigger the options-and he did. The P/E ratio is still much higher than competitors, but he has advertising power, so I knew he would try and juice that stock price to his advantage.
It also had revenue and production targets aside from that stock target. So even if the stock could be manipulated that far somehow, it wouldn’t have been enough on its own.
Right... juice the stock.. Musk worked his ass off on the model 3 at the time and the only thing he squeezed was the massive short sellers who were so sure Tesla was going bankrupt and constantly put out FUD and hate pieces on Elon to disparage Tesla and Elon.
Incorporating in Texas is just the peak of, "I'm taking my ball and going home," only Elon doesn't actually own the ball and has to ask a bunch of people if he's allowed to
Can Tesla shareholders sue those lawyers for damages since Tesla has to pay them? Tesla would not be where it is without Musk and his ability to attract a great team. Shareholders voted on the pay package regardless of knowing if the compensation committee worked with musk or not. If there is any connection between the judge and the law firm getting some huge payout on the shareholders behalf, which is obscene since shareholders want Musk at Tesla and think he deserves that payout since he made those shares valuable through extraordinary effort. Compare Musk's genius and work ethic vs any other CEO and compare the fundamental value created by the technologies at Tesla. Tesla isn't some pump and dump like Nikola or other BS companies. Perhaps the payout should be proportional to the value of the 9 shares represented in the case or any loss that shareholder had (negative loss?)
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@@philliptemple9841 Musk is a fool and has done nothing but ruin the reputation and value of Tesla. Techbro billionaires aren't real businessmen; they're just lotto winners. Musk put his unearned wealth into a rocket company and pretending to found an electric car company, so there are worse ways he could have blown it. Still, his inexperience and arrogance have finally come back to bite him.
@14:00. The corporations law professor I had in 1992 told the class that it was California's and Wisconsin's government employees' retirement fund managers who were demanding corporations compensate executives by stock options. He said the motivation was comparing the new massive growth in stock prices of computer hardware and software companies with the long established corporations' lack of stock price movement. The managers wanted the old corporations to be like the new market newbie corporations with respect to stock price growth. They believed the carrot to get them to focus on stock price growth was to make their compensation dependent on stock price growth. This of course allowed all the scammers on Wall Street into the board room to consult on their tried and true methods for stock price manipulation (as well as Steve Job's famous backdating of stock option grants).
Tesla deal was based on production out put, sales, earnings and so on. It was not based on pure share value. Tesla earning per share increased by 400 times during that period.
I know the Elon hate is fun, but really he took an absurd "all or nothing" package that everyone thought was an idiotic bet by him back then. Neither here nor there though: a single judge threw out the will of the board and shareholders. It's a violation of the autonomy of these corporations simply because the tremendous gains (bordering on bankruptcy to millions of cars and other lines of business) resulted in a huge number. This will make every corporation incorporated in Delaware reconsider whether they want to be there. Delaware doesn't have much else going for it besides corporate tax law/security.
Corprations by definition are not autonomous. They are as autonomous as Elon's self driving taxis. Built and designed by humans, and sometimes works for the common good, but not always. There is an implicit contract between the corporate officers and shareholders. They can't mislead shareholders about facts pertinent to a decision they are being asked to make. Musk and the Board did that. So he got caught. Stupid is as stupid does.
No, it won’t, because every other business incorporated in Delaware has a basic comprehension of how to cleanse interested party transactions to avoid entire fairness review (which has been the standard for *decades*) or, at the very least, enough sense to include indicia of fair dealing in their exorbitant comp packages. Elon was practically begging to be sued by flaunting such basic standards on such a big deal, nobody else would have done it this way because everyone else in DE knows better.
The possibility that the court can strip Musk’s $55 billion (ostensibly to protect the shareholders), but then “allow” the attorneys to walk away with nearly half of that bag seems ironic at least and unethically wrong at worst.
I'm curious where that money is going to come from. Since Musk's stock options were voided, will Tesla be forced to create $19B worth of shares to give the lawyers?
yup clown world, what did the lawyers provide to the shareholders? what did elon provide? 10x increase in company value from 60b to 600b, but a compensation of 55bil is to much? what a joke a court system. the only reason they going after him is because he wont sell out and be controlled by them and is for freedom of speech. Its all about what he did with Twitter
He sold over 1.3 million Model y cars last year. If anything, the stock is low because liberal media hates Musk for speaking out against Nazi Biden’s administration.
@@aimlesfezthe most honest answer I can give you is, personally, it is an interesting study of mass manufacturing economics, the stock market, technology, social media, internet culture, human psychology and more.. the fact is a lot of investment has been made on the back of his vain school boyish future tech promises/ insistances and maybe hew over the curve now
Sawyer Merritt: For the Judge in this ruling to suggest shareholders were not aware of the close relationship between Elon and some of the Tesla Board members is simply ridiculous. I (and many others) knew exactly what we were voting on in 2018 and why. We approved an extremely ambitious compensation plan that gave Elon no guaranteed compensation of any kind - no salary, no cash bonuses, and no equity that vests simply by the passage of time. Instead, Elon's only compensation would be a 100% at-risk performance award, which ensured that he would be compensated only if Tesla and all of its shareholders did extraordinarily well. I would approve it all over again if I had to. This compensation package couldn't be gamed by Elon. He had to hit extremely difficult market cap and revenue milestones to get any of these tranches. And then if he did hit those tough targets, he couldn't sell the shares from the package for 5 years once exercised. So many "experts", Wall Street types, etc, laughed at Elon and Tesla in 2018 and said these market cap milestones were impossible. Elon then delivered on them. Tesla stock is up 10x since the 2018 compensation package was announced, and revenue up 9x.
Everybody is equally "expert" at law. Law is ultimately BULLSHIT since it is pure APPEAL TO AUTHORITY. Tough shit -- shareholders all agreed to let this judge BLOCK Musk getting paid billions for doing nothing. If government wanted to, it could PAY ALL USEFUL WORKERS billions of dollars instead.
yeah, for sure. i remember when the 1st time he snapped back at a market analyst on a quarterly market call, paraphrasing was like “so, elon, are you saying you going to hit your numbers this quarter?” he responded like “is that all you care about … money? what is your soul worth?! asshole”. and hung up hahaha 4real tho it sucks he didn’t have a true mentor on the team (or an AI with enough foresight) to anticipate this, that he’d succeed 💯 beyond wildest dreams & still have to hold up to scrutiny of basic management 101 principles, freedom from conflict of interest , duty of care, duty of prudence .. he is like 4 yrs behind on soaceX tho loolll
@mipmipmipmipmip hahahahahah you are joking right???? If you aren't you don't know how accounting works in this area of business. BTW the package was designed to prevent any gaming of the stock price, revenues and etc. Ask anyone that knows what they are talking about.
You sound like a cultist. You only knew what you were told, and you weren't told everything. It was the right decision because, obviously in your case, the law is that shareholders have the right and the need to have all the pertinent information about any decision they are asked to make. Elon and the Board witheld pertinent information frim the shareholders, and they were found out. It doesnt matter if hes a cult leader, the law still applies.
@@SamDisher001 No he didn't lol. You are genuinely insane if you think anyone in the world works hard enough to earn the lifetime earnings of a medium sized village
Ford making automobiles affordable for everyone. Edison creating the first electrical grid. Fritz Haber inventing artificial fertilizer increasing food security for billions. Yes there are people who's contribution to humanity are worth more than a million workers.@@unluckygamer692
And still much smaller than how much the stock value has grown since they first agreed on this compensation package. Imagine mary barra agreeing to a compensation plan where she would get nothing if the stock stays stagnant. Obviosuly she would never accept such a thing
@@slopedarmor tesla stock have been under performing the end of 2021. He doesnt deserve that compensation since all of his major promises to shareholders have been underdelivered (FSD, robotaxi, energy, solar, CT, Semi, 4680 and the 25K car). He should take his head out of his rear end and start concentrating on growing the business instead of acting like a narcissistic man child
@@greenearth9945 Musk was not rewarded on share value. He was given a larger share of the company if he was to increase sales, profits and so on. What he managed was amazing performance.
@@slopedarmorI think that is the greater problem too. Stock values that are weirdly detached from other company performances. Like the main output of the tech companies is stock value.
I think that some people forget what taking a company *public* actually means and how the founder being involved must change because they are using public investment to support the company. If Musk wants absolute control of Tesla, then he’s more than welcome to take it private.
@@TheThriftShopSampler the problem with your assertion is that you did not understand the nuance of what I said. You could have asked me to elaborate because this forum is meant for brief comments and not a dissertation and that is how my initial comment was to be understood. But cool response, bro.
This is so timely, as i listened to your podcast this morning about Twitter going broke. I need updates before i go home and whilst at job, so i subbed to the pod this morning. And here you are!
It is not a good decision Musk took a small workshop company to a billion dollar manufacturing company. He increased earnings per share over that period hundreds of times. If Delaware does not rectify this decision it will ruin their stable business image. Right now there is a series of freak outs happening with companies based there.
At the time that Musk was granted this compensation package Tesla had never made a dime and all of the financial talking heads were laughing at the compensation package and predicting the imminent demise of Tesla because the big boys were going to come and show Musk how to make electric cars. Now Tesla is a manufacturing powerhouse and the big boys are in a struggle to survive. My 401k has done significantly better since retiring from Intel eight years ago and being able to select things other than mutual funds. The last sixteen years at Intel I never had a stock option that ever hit the strike price while the CEO who had a much better compensation package than I, was getting the company billion dollar plus fines for anticompetitive practices in Europe and Asia. I feel Musk has earned it.
If he gets away with this you need to sell your Tesla stock immediately. Because it means he's using Tesla as his personal ATM. Is there a car platform is 5 years old they need to be spending that money updating their tech. If they don't do that then they're going to get eaten alive by competition in the next 6 years and then those government subsidies that make them profitable will go away.
I genuinely worry about the Musk fanboys. All these guys probably pride themselves on valuing Logic and Reason, and yet they buy into the lies of this futuristic fantasist.
I’d love to see the justification for the $56bn bonus. Company loses 70% of its value over 2 years. The biggest corporate loss of all time. A company that has made $25bn profit for its entire history of operation. Yep, sounds like a reasonable payment, $56bn of investor money. Nothing wrong with that.
@@Matt67012 Musk isn't your pal, he neither knows nor cares that you even exist, he's not going to give you a pony. You don't need to reflexively stand up for the serial liar. But of course you will.....
Musk is playing a wonderful game of "let's see who has bigger balls" and sadly the only ones who will feel the pain are the ones who believe in him unconditionally.
Patrick you failed to highlight what Musk had to deliver to receive the stock. The deliverables were quick challenging and made all the Tesla stock holders a great deal of money.
I think a lot of these blokes are rewarded for hyping up stock value, to the point where stock value is strangely detached. Like a collection of eternal startups.
One important aspect was not mentioned in connection with Musk’s compensation package. The conditions/milestones for the options and how risky it was for him, because the milestones seemed unachievable and he would get nothing unless they achieve the milestones
This lawsuit was originally filed in 2018, shortly after the pay package was approved. It was not filed after all 12 milestones were met. One of the things argued in the trial was that in addition to the board's lack of independence, it also had internal projections showing the conditions/milestones were less risky what they presented to the shareholders.
@@jameslake7775 The judgement was 100% evaluated in hindsight. There is no reference to a grant date valuation. Thus, fairness was not appropriately considered. The Feb 2018 proxy statement includes a copy of the comp agreement. As someone that values such things for a living, the comp arrangement was sufficiently disclosed to solicit approval. I could value the arrangement with publicly available information at the time. We don't rely on company estimates. The judge has no business opining on the facts of the case. The facts she considered are simply irrelevant. The issues are well outside of her area of expertise.
It is obvious from the wording of the opinion, that it was a political decision, political statement. I hope the superior court has not been infiltrated yet.
18:00 The way I heard it, requiring disclosure of top officer pay also contributed to the rocketing of that pay. Regulators thought it would have a “name and shame” effect, but what really happened was execs could see their peers’ pay and demanded more.
*"And it's likely that the company will need new independent directors" ... Sure. Perhaps Elon will even allow X Æ A-Xii to conduct the due diligence for suitable candidates.* 😂
Don't forget that media are owned by rich families that want to "educate" you... Like how half of america think that thhethe biggest problem in the world is immigration while the other half think it is racism... It takes decaades of propaganda to brainwash people like that...
It seems like roughly speaking, his pay was ... Twitter. Which is amusing incentive. "Do a good job hyping the stock on Twitter and we'll buy it for you."
Maybe it's just because I'm not used to the vocabulary of he business world, but the use of "compensation" to describe someone essentially rewarding themselves for continuing to run a company they were probably going to carry on running anyway is a bit odd. If only we'd known it was such a burden. I think what's most galling about this is how divorced this "compensation" is from performance. I've seen that before. If you're in charge and the company does well, of course, you get a big bonus. But if you're in charge and the company does poorly, you get the same bonus for "steering us through chopping financial waters" or whatever.
this comp package forced the stock to grow and stay at 650b for, if a remember correctly, at leats 2 years, i think. it also had to grow the revenew. So no, he wouldn't have been paid if the company had done poorly.
It's a tax dodge. CEOs don't get insanely high salaries as these are taxed. Instead they get 'compensation' in stocks and dividends, which are taxed less or even not at all when structured properly. Scumbags the lot of them.
@@Garthdonnot all of them. Check out the chap that musk was mocking when the guy couldn’t find out if he was being let go. The guy is genuinely disabled and when Twitter originally bought out his company he structured the deal so he paid all the tax in his native country and way more that he could have done had he been less of a decent guy. His name is Haraldur “Halli” Thorleifsson and sounds like a thoroughly decent bloke unlike musk who went on a Twitter trolling session against the guy casting doubt on his disability and saying he did nothing at the company. Musk ended up tweeting an apology of sorts as Hallie had a severance cause in his contract that would have cost Twitter a hell of a lot of money, in addition to a very expensive law suit about disability discrimination.
Im a stockholder since 2016 Elon created so much value for me and other stockholders and should be rewarded for it. I voted for the package because it was good. It only gave compensation for giants returns which were delivered. Try and read some of the judges statement it's clear it was an activist judge. There is a reason why all the stockholders are angry, this judgement is against stockholders, freedom and capitalism.
55 billions CEO pay, whatever the form it takes, is so high that it basically endangers Tesla. Its no longer a "golden parachute", its a golden Zeppelin.
golden parachute is for when a ceo is fired. His comp package required to maitain the stock value for 2 years at 650 billion ( i don't really remember the time horizon they set, but it was long) and growing revenues. Definitely not a golden parachute.
The terms of his comp package was basically “if Tesla stock goes up 11x I get 10% ownership but if it doesn’t I don’t get paid”. Most people thought it was a joke but if he succeeded they’d be over the moon because their investment went up 11x. Now a liberal activist judge took on a joke of a lawsuit and says it’s subjectively unfair so it’s all scrapped.
@@---jj9lfMusk hinted he would leave Tesla if he did not get more voting power. 55B seemed like a vampire bite before leaving the Tesla body cold and dead. It really looks like it was a parting package, whatever he says
I very much enjoy listening to your commentary, thank you so much. I found you by accident and have spent the last 3 hours binging you, very, very interesting.
Greed! Whether the Tesla board was wrong or right to make this offer, Musk shouldn't have requested it. Once you go public, it's not your money anymore.
They've already got their bill. I say they lost about 1 billion dollars in taxes each year because of this single wrong judgement of this single female judge who was only following what her boss, Joe "Geezer" Biden told her. I am sure the government of Delaware is utlimately happy with her and him.
But let's be honest how? Because they agreed to pay a wage based on growth? The 55B is around 9% of the value created, I don't understand the rhetoric of lack of disclosure of relationships, when the board properly disclosed the pay package, that is all that matters...
@@rui518 It was not a wage it was a share of the company. Musk was offering a great share if he could meet certain targets such as sales and profits and he smashed those targets. People are focused on the raw number when they should be focused on the size of the company he was gaining which was 10%. Musk could liquidate his share. And go do something else and people can just drive their normal petrol car.
If your a private company pay yourself whatever you like…if your a publicly traded company it’s frankly ridiculous that you think u should be payed $55 billion..
The court did the right thing. The reason companies incorporate in Delaware is because of the strong shareholder protections which makes it easier to raise capital and sell shares. He can not change the state of corporation without the approval of the shareholders which would be a stupid thing to do. If Elon thinks the pay package is appropriate then he should let the shareholders decide at the annual meeting
rhe problem with the "Elon is Magic so we gotta give him whatever it takes" is that more and more people are disagreeeing with that, and that disagreement itself is becoming a public spectacle, and that kills his magic. It's based on the belief that he can bend the world to his vision, and that ain't happening here.
That ain’t it. The comp package was crazy because it was based on moonshot tranches. Nobody thought he could 10x the company. He did. Then the lawyers smelt blood and launched a bullshit lawsuit.
The best part about Elon is that he's stupid enough to be stupid in full view. Zuckerberg and the Metaverse or Thiel trusting quacks is still there. I think of Steve Jobs as the bloke who made himself into a guru brand, to the point where his work was partly to appear on talks and be the Steve Jobs brand.
Patrick provided a fair assesment of the situation as always. But if this was supposed to be a lawsuit that should have benefited shareholders then why all the Musk haters are cheering and all the Tesla shareholders are angry?
I'm not a Tesla share holder, but I'm not a fan of government meddling. If my investment is bad then so be it. I'd rather lose money than the government intervene and try to force someone to make my investment better. Govt meddling in the company I invested just seems like trouble even if its "for my benefit".
@@marc-andremichaud1251 Seems you did not watch the video. The situation is that Musk and Board of Directors were not disclosing information the shareholders have a right to. The government in this case was not protecting investors from making a bad choice, they're protecting investors rights to be informed. But I dunno, maybe you like to be swindled.
@@user-xl5kd6il6c Do you mean performance of his self-marketing? He wrote the terms and no BoD approved it. Guys like you will argue all day long that sheisters like Elon deserve to own the planet, just because.
Elon is only paid minimum wage! He gets stock options based on several requirements which guarantee that the stock owners always earn more than Musk. Elon continues to start amazing companies but he keeps them private because it is just not worth the drama and lies to make the companies public. This is our loss.
@@jameslake7775 $55.8 billion is a delusive amount. The compensation package was worth less than $1 billion when it was approved by shareholders. What the compensation package later appreciated to is irrelevant. It's a bit like betting on a football game after it's over. It's sad how easy it is to persuade the general public with irrelevant information. You appear to be a classic example of someone that believes they have an above-average IQ yet you don't have the capacity to process relevant information. You are in good company though, the judge has your same level of intellect.
Elon, what a transformation. 5 years ago, he was Tony Stark, loved by environmentalists, clean fuel/Save the Planet, Dem party. Now he's hated by both sides, 😂, Texas still won't let Tesla sell EVs in the state! Despite putting the largest 🚗 factory in USA near Austin.
See, most CEOs keep their dirty dealings on the down-low. Elon had to broadcast his whackadoodlery to the whole world because 'reasons'. Had he just kept his mouth shut about vaccines, the 2020 election, workers' rights, employment discrimination, and climate denialism, he'd still be beloved. He could've been a greedy Republi-scammer behind the scenes while garnering money and support from people he's diametrically opposed to. Why he ever thought it'd be a good idea to flip off both sides instead of play both sides (like most CEOs do) is beyond me. Worst financial decision he ever made.
Head to brilliant.org/patrick/ to start your free 30-day trial, and the first 200 people get 20% off an annual premium subscription.
Bad Judge
Is there a reason you direct so much dissent towards America?
Musk is an actor like his mother, just he acts the role of a CEO.
All the big money and assets are held in trusts by the Car tel - have you ever seen billions go to the family once they pass??
I love the irony of being interrupted from your carefully curated video, Patrick, to see an AI generated video of Elon Musk promoting a pump and dump crypto scam 😂
Would the real Elon Musk please stand up? 😅
(I'm sure a part of you is dying, Patrick, knowing that Google, one of the most powerful companies in the world, is riding on your popularity to grift your followers with the very crypto scams you uncover) 🤪
The judge obviously voted for Biden
"This was above minimum wage at the time" was one of several very good jokes.
So dry I need to take eye drops.
@@biledemon85 so arid it arguably contributed to global warming.
Thanks Captain Obvious
Except that it isn't the truth. The incentive package was universally viewed as insane and completely unachievable. All analysts thought Musk would work for free.
@@MattCasters But the cash bonus of $2 million (which was above the minimum wage) was paid to Nelson Peltz, not Elon Musk, so I don't see how you can claim it isn't the truth.
TIL minimum wage in 1993 was between $1 and $2 million per year. Fascinating!
In Ireland there was young people earning a lot less than that and were glad to get the job as there was far more not earning.
Guess that makes it okay then.
According to the most recent data.
"a salary of $1 a year, which was below minimum wage at the time"
But he did receive a cash bonus of $2 million which which was above minimum wage
And some sweet perks.
If you're talking about Steve Jobs, he took a dollar a year but received 90 million jet. I wonder what that be today and today's dollars. I'll take $1 a year if I can get a 90 million jet out of it.
@@danliddiard Company jet, plus new car every year & a security detail
@@danliddiardhe wasn’t talking about Steve Jobs. Did you even watch the video?
Here are some numbers just to put 55.8 billion dollars into perspective:
The cost of the Burj Khalifa, the tallest building in the world: ~1,5B
You could buy more than 35 Burj Khalifas for Elon's compensation package.
The GDP of Iceland: ~26B
You could buy 2 years of Iceland's total economic output for Elon's compensation package.
Nintendo's profits from all Mario games ever sold: ~45B.
Elon's compensation package is bigger than 40+ years of profits from arguably the most iconic video game series in existence.
The compensation package of Stephen Schwarzman, head of Blackstone and one of the highest paid CEOs in America: ~253M
Stephen Schwarzman would have to work for over 200 years at his current income to reach the same level as Elon's compensation package.
burj khalifa cost that because they used slave labour
@@emilesmithrowe8353
Good point.
Probably should have used the 4.75B cost of the Large Hadron Collider, the biggest and most complex machine ever constructed, as a more fitting example
Lol. And the burg k don't have plumbing!
I don't get it. You can't build anything without cash, which stock options aren't. Games profits are revenues and GDP is irrelevant. I don't think you understand finance.
Phillip.
I have to ask, did you spend a lot of time on niche forums in the late 90s/early 2000s? I haven’t seen, well, anyone do a signature at the end, who wasn’t spending a ton of time in forums back then, when people did that. A curious remnant of a time long past.
20:10 "after all man cannot live on Stock options alone"😂😂😂😂 well played Patrick, well played 👏🏽👏🏽
LOL
Especially underwater stock options.
Well, you can turn option into stocks and then either live off the dividend or just sell some of them.
Stock options are worth money even if they are currently under water, but I guess some or most of these option grants are not transferable.
😂😂
If a business is too loose for Delaware, you got problems
As a non US citizen I hope that I don't cause offence, but if a business is too loose for the USA, you've got a problem. In most countries around the world, Musk would still be in jail
for his Tweet to go private.
what are you talking about? jail for a buyout? @@davidbrayshaw3529
Stealth fraud artist. 😂
@@DCGreenZone Stealth?
@@hendrikd2113 Perhaps, the dozens if not hundreds of YT videos crediting him with the axial flux motor, (Elon just revealed and so forth) videos crediting him with BYD Blade Batteries, Sodium Ion Batteries, Sulfur Ion Batteries, and many many more tech advances he had nothing to do with.... makes me wonder who is behind all those videos. I've blocked most of those channels, one sneaks through now and again.
This bizarre trend of overpaying CEOs has essentially become circular (and nearly tautological) in its justification. A well paid CEO is well paid because CEOs at good companies should be paid well, so obviously if you're paying your CEO well it means you're a good company. That's how that works, right?
Sadly, yes. Pathetic, but everyone else playing the game expects to reap the same rewards so there’s no incentive except for things to go up.
What's a "good company"? It is a very difficult thing to define when you really sit down and think about it.
@@davidbrayshaw3529 Sure, but there are reasonable measurements you could propose for determining if a company is good, and bad measurements. And "how much money are your executives paid" is one of the absolute worst ways to determine if a company is good or not.
@@sgttomas Then it sounds like the rules of the game need to change.
@@Mrinsecure that’s what we said in the 90s. Rage Against the Machine! Then people get older and make different choices. ….i think this has always been and always will be the game we play. Find a different path for yourself and leave the others to do their thing, is all you can do, I think 🤔
Once worked at a Logistics centre in UK that had a contract to distribute a US product that had a shelf life. The US managers of the company in the UK would change regularly after all falling into the quarterly reporting trap. The stuff was pushed out to retailers on sale or return to manage the reporting then a chunk would come back as it passed it's sell by date and the manager would be fired, rinse and repeat until they gave up on the UK market as unprofitable....
Hot potato management, been there (as a lowly programmer) and it was unpleasant place to be.
Getting paid with options sounds like a infinite leverage glitch
If you do a good job, yes.
@@matiashamalainen7965Just as much if you don't. Leverage goes both ways.
@@matiashamalainen7965 Doing a good job is immaterial if you've got the board in your back pocket, examples of which abound in the video.
pump and dump, make it look like you are doing a good job, just long enough to unload your soon to be trash.@@matiashamalainen7965
It's theft from the other shareholders.
It's inflation of the shares.
Not at all different to the Mafia skimming from retirement funds of the Teamsters.
Investment funds, and index finds that hold stock are essentially ripped off when executives grant themselves massive pay and stock options.
It's simply theft.
$19 billion for being a lawyer. Talk about obscene!
The most funny portion of it, at least for me, is that the guy leading this lawsuit only had 9 shares.
Ironic, isn't it? Tesla shareholders should sue and have them paid $350 per hour. See how the lawyers like that result.
@@MrSomsoc Elon must not have the correct politics.
Maybe he should be paid his share of the ultimate award and leave everyone else out of it. The lawyers can take 3 shares worth.
It's just as obscene as a CEO taking whatever he wants out the company.
Everyone loves getting paid on commission as long as it's not out of their pocket
In response to people talking about LLCs in different states being like the "Switzerland of the US", neither Delaware nor Texas are anything close to offering the level of privacy that Switzerland was famous for. Nevada is better in this regard, but... at least for people who are living outside the US, arguably the best tax shelter product available in the world now is a South Dakota Trust with the addition of Wyoming LLCs as needed. South Dakota and Wyoming have conditions on these entities that keep the identity of the true owner of completely hidden, including not reporting information to foreign governments or even the IRS. If you want to get really crazy, there's some people out there that claim that setting up an LLC in the country of Nevis and operating it here in the US is even more powerful than even Wyoming, and you'd be shocked that this is even legal once you learn some of the benefits Nevis LLCs purportedly offer.
yeah ive read that recently. like 200 paygrades above my level lol. doesnt explain why companies still in ireland tho.. or why celebes still have tax havens offshore (panama papers etc.)
Interesting 😮
@@chillphil967Ireland is in the trading zone of the EU and has very low taxes in the EU. So for operations in the EU it's better to do it from Ireland than to do it from outside the EU.
Offshore holdings are to hide wealth, but you can't operate a business from there because then it would be obvious who's behind it
@@chillphil967 Ireland is pretty simple. Lowest corporate tax rate if your structure your business just right (12.5%) in the EU. Combined with English speaking population, decent place to live for high skill immigrants and a good education system churning out graduates able to work in biotech and tech industries. Every international company needs an EU base and Ireland is a very good one.
"level of privacy that Switzerland was famous for"
emphasis on WAS. And when it seized to be, that effectively meant it never was, as plenty of investors in Switzerland have been named in published papers.
Common Sense Skeptic is a great channel, good on you for mentioning them.
Nice 👍🏻
I will second this. They do great work and should be recognized for it
it's garbage.
If you dislike fact checking the powerful 🤷 @@---jj9lf
Here here!
That thumbnail 💀
Cult of personality, whether in business, politics or pop culture, is the reason we’re in this mess.
Charismatic leaders have and will always exist. Get over it
@@JaviEngineerbut people shouldn't be so over his heel
If they just say they like his vision then that's ok
But they put him on a pedestal so high
Like he is some Messiah who will save humankind
When he is just a person who just had good vision to own stocks in a good company
@JaviEngineer You seem to be the one whining and bitching like a woman
@JaviEngineer You seem to be the one whining and bitching like a woman
@Asunnybeach like it or not, if it wasn't for Elon Musk, we wouldn't have the rise of electric cars and reusable rockets. Us investors WANT Musk to be compensated properly for the stock and business increases he was most certainly responsible for. We WANT him to stay on board to push the compact, semi, and so many other Tesla projects forward. As such, very simply, we'll vote for another lucrative package but preferably out of the reach of Biden in Delaware.
How the lawyers in this case get paid seems to give rise to perverse incentives too. Some enterprising lawyers might try to get some random shareholder (possibly by paying him) with 1 share to start a case just so that they can reap huge sums of money if they win.
Do you think lawyers who can command such fees are interested in ambulance chasing? There is no compensation payable in this case to the plaintiff.
True but here we have a court that makes the actual decision so a lawyer only does that if they think it's actually wrong.
You can invest in lawsuits like this. This how all those class actions against your credit card company are born.
@@tomlxyz The payout here is truly enormous, especially compared to the harm suffered by the guy with 9 shares. Considering that, many lawyers might want to try to litigate cases like this even if they think their chances of winning are small; the expected payout would still be large.
Why would that be a perverse incentive if the company is guilty?
Musk's proposed compensation package is more than double the sum of all the profits that Tesla has ever made. In what universe does this make sense? Only if the principles of Hyperloopen Accounting Standards are applied can any sense be made of this ...
It's stock not cash
@@121dan121It's still a transfer of value.
He 10x'd the stock, and this is just options. Mary Barra is slowly destroying GM, but unlike Musk her pay isn't tied to performance. This guy with 9 shares 10x'd his money. Because of Musk. Telsa wouldn't have 10x'd without him, and you're delusional if you think otherwise.
In the universe in which profits are not relevant to share price. That's a universe in which things can go down as far as they went up.
@@121dan121 doesnt matter lol its shareholders money afterall
The pay plan was rescinded, not voided. There is an important legal difference. Recision allows the same pay plan to be put back in place, and also creates a bizarre legal ambiguity where you can’t go back in time, but the judgment acts like you can.
So we can reinstate it with a new vote as shareholders?
Tesla's board can, and likely will, issue a new comp package that "makes Elon whole", in addition to setting new targets with additional compensation or, as discussed on X, a second class of stock that provides Elon control without diluting shareholder value. And it's likely the shareholders would vote for such a plan.
But you can't reinstate the package because it's not 2018 anymore, and thus the package as written in 2018 makes no sense.@@devintriantos
Based on accounting experts, Tesla board cannot retroactively redo the compensation plan because the tax consequences and total cash outlay would easily bankrupt Tesla!😂
And that also means that the lawyers are not entitled to $19B. Also, to what extent were these lawyers representing all shareholders? The benefits that these lawyers are entitled 1/3rd of, surely do not encompass the benefits to the company or shareholders, but to the benefit to the guy bringing the suit, and his 6 shares.
You are completely wrong here. This lawsuit is about the 2018 compensation package. Stock options were granted but never exercised. There has been no taxable event, and there wouldn't be if the pay plan was reinstated in its current state@@Agent77X
Wonderfully done - makes it very easy for anyone to follow along with what has been happening not only at Tesla, but generally across the Board. But especially at Tesla it’s gone completely bonkers.
And compliments to you too on your work on Musk/Tesla over the years!
The problem with Musk is, he is not a "businessman" but a cult leader. Bakwan's follower were also fine with his 60 Rolls Royce and the other stuff.
Imagine if you as a worker argued you needed extra compensation and a stake in the business to properly do your job.
Exactly.
In software this is actually very common for ordinary engineers, especially startups.
I mean have you ever heard of asking for a raise or negotiating salaries? If people haven't then they should try. It helps you a lot in earning more money.
Better yet, imagine if you (as a worker) went out and started your OWN 1/2 a trillion-dollar company ...
Tesla offers a generous stock option plan to all the employees.
Gotta love the corporate culture where the captains of the ship are hugely rewarded for merely doing their jobs, while all the success of the company gets attributed to them. At the same time whenever a company is doing badly, its always someone else's fault and the supposed captains of the ship never take responsibility of anything, in fact they're often the first ones on the lifeboats when they ground their metaphorical ships on the rocks.
First thing companies do when they're in trouble is lay off employees. They even do it when times are good but growth is slow. You never hear anyone say "We had a bad quarter, time to cut costs by firing the CEO."
“We laid off the staff. This was so stressful to us that we had to take a bonus to unwind”
This may be a characteristic of human nature. Have you ever seen a politician accept responsibility for anything negative?
100%
Your comment doesn't apply to Musk. He pulled this company out of the fire. It was the most shorted stock in history at the time and he 10x'd the stock price. You don't do that by merely "doing his job". He performed a miracle. And he should get what he was legally promised.
It’s incredible how we can watch your show and get such great detail and info on financial news stories and this channel is so much better than the newspaper or tv
Yeah I didn't see anyone else mention the difference in franchise tax/fee cost. Absolutely moronic
And yet in such a detail he fails to explain how insanely difficult it was to meet the goals in that incentive package. Tell me how biased Patrick is without telling me he is.
@@BartekCelaryyou know it better than the Delaware court? Heh.
@@BartekCelary me thinks you're one of those people that has a very loose grasp on what the word bias means, so they run around screaming "bIAs!!" as some sort of panacea for criticism.
My guy, Elon has a 10% stake in the company and the board are a bunch of his closest friends. The "difficulty" had nothing to do with the legality of whether or not anyone is acting in their fiduciary duty. Elon already has every incentive in the world to prioritize Tesla's share price. From the perspective of a shareholder, the judge and anyone with a brain, he doesn't need an extra, unprecedented by orders of magnitude incentive package.
Elon Musk: Am considering taking Tesla private at $420. Funding secured.
😅
You think? Hqve you seen the state of the financial markets right now? He would have to buy out shareholders to do it, and he doesnt have that much cash. No collateral, no loan. If he takes it private, he would have to put up his shares and other assets as collateral to get the money. He can reincorporate in Texas, but it doesnt mean his problems would go away. He lacks credibility, especially as he and the board lied by omission, by not revealing the whole deal, which would devalue the value of their shares. He showed how much regard he has for his shareholders. And the smart ones will pay attention to that.
Musk is Tesla and this is Biden’s administration getting back at him for talking out against Biden, don’t kid yourself. Biden’s administration is like Nazi Germany, speak out and we will bankrupt you!
v funny. Elon a victim of his own sense of humor. The biggest joke of all is that it wasn't a joke at all. He was deadly serious. The Saudis just changed their mind.
Elon Musk hit with fraud suit after admitting to SEC he said Tesla would go private at $420 a share in 2018, because he thought his then pop star girlfriend Grimes would find it funny.
@@BigHenForDo you honestly not know about the 420 tweet?
Brilliant, detailed analysis. Even as a Tesla shareholder, it’s hard to see Musk’s attempt to incorporate in Texas as anything but a temper tantrum.
i see it as a smart business decision.
@@10010x0x0x01101XX0X1 Can you elaborate on the benefits of the decision?
@@10010x0x0x01101XX0X1 is that you Elon?
@@10010x0x0x01101XX0X1I see you as a waste of space.
Vote him out then 😂
Would have been useful if you had presented the structure of Musk's pay package. Would've fit in nicely after the very interesting "history of CEO pay" part of the video.
Patrick is a cheeky passive aggrresive little b-word, he is not seeking balance.
This is the key point. The pay package was based on hitting incredible numbers. No one thought he would be able to, yet he did. Yet, the story seems to gloss over this fact. Including the judge. He 10x shareholder value. That's insane.
@@jesseholliday3480I enjoy him with a dry Martini.
Patrick is turning into an academic. His background should allow him to see the business case for this comp package - $60B to $600B is incredible.
@@iSport2ka8 above my pay grade. Just stop stealing what I've earned.
“Dear shareholder,
Let me tell you why paying more corporate taxes and myself is a win-win for you….”
You would think that more shareholders would have had a problem with the pay package than an obviously manipulated 9 share holder
@@TheAnonymousOne67 The stock price 10x, why would I have a problem?
I don't think this clown understands how Elon's compensation was structured. Morons coming up with simple minded conclusions based on their shallow understanding of events. Typical youtube morons.
@@andrewandersson You shouldn't
Tesla shareholders are like no other. Elon's $55b compensation package works out to the equivalent of $17 per share. Of course, Musk still owns about 176 million of those which means if dividends were paid to all shareholders out of Musk's renumeration package, he'd still be in for just under a $3 billion payday.
But why would any shareholder want dividends when the CEO can take the lot? That's the way Tesla shareholders think. Rather than banking a $17,000 check based on the 1000 or so shares that they own, they'd rather give it away to their esteemed leader. But Tesla is not a cult. I want to make that clear. Tesla is not a cult.
Obscene doesn't even begin to describe this situation.
Cheap money from the central bank inflates stock prices, what should we expect? What a waste to civilization
I hope you're talking about the fact it was voided.
Because Musk's pay was based on specific targets - growing Tesla to a $600bn valuation, which he managed to do.
If he had failed in that his compensation would've been basically nothing. So he gambled and succeeded and now he's being punished for it.
Thats disgusting.
@@MA-go7ee nonsense
@MA-go7ee
Awww, poor billionaires.
Why would you argue for somebody who considers you and everybody like you as utterly disgusting and would never associate with you? Arguing for billionaires will never make you one of them, it will make you into fresh meat ready to be metaphorically devoured by them, if they ever notice you at all.
Unfair or not is irrelevant. You will never be one of them. You'll stay poor and angry. You're not a temporarily embarrassed millionaire, you're sitting in an eternal hamster wheel and will never reach your goal.
@@MA-go7eeso he gets pay equal to 9% of the valuation ... In what world is that an efficient use of resources?
It is difficult for me to take Tesla investors seriously.
I follow some of these Tesla investors on RUclips. They are convinced that Robotaxi will revolutionize transportation and bring in huge profits to Tesla. They also believe the Tesla energy will bring in huge amounts of profit. And they also take Mars colonization seriously. They put ordinary cult followers to shame.
Let’s say they’ve raised my opinion of Britney Spears fans.
They do seem to believe in magic, and generally behave like people in a cult.
Bunch of technologically and financially illiterate yahoos
Hi Patrick, Another of your very best programs. Thank you.
"he took a salary of only $1 a year, which was less than minimum wage at the time" 😂
I love these deep dives into topics like this. I appreciate learning about the 'why' as opposed to what various people's opinions are.
Indeed. We could use more channels like this.
The world would probably be better off.
That history of executive pay etc was fascinating. More of that kind of thing please
No executives pay. Musk had his own investments in the company.
@Art-is-craft I've forgotten by now but as I understand it Musk got a lot of government grants.
It's amazing how huge salaries and the status of running a big company aren't enough to motivate senior management. Seems to me senior management are in the wrong jobs and companies should find people who actually want to be in charge.
if i was the ceo and i made the value of the company go from 60bil to 600 bil, yes i do expect to be compensated at 10% of it. look at the lawyers they asking for 33% to win the case, is that fair compared to a ceo that raised the value of the company 10x? what did the lawyers actually do? ether ways, tesla without elon is nothing... elon is basically tesla, losing him for tesla would be similar to apple losing steve jobs the first time
@@songhan1586 I think you've fallen for the propaganda. Many people contribute to the growth of a company. I can point to things I have done that put large sums on the bottom line, but I have never been 'compensated' for it. If CEOs had to pay out equal sums when companies fail then high rewards might make some sense, but even during the banking crash CEOs walked away with pensions, salaries and bonuses intact. To add insult to injury, executives received bonuses simply for restoring the status quo or less.
The bottom line is that executives pay themselves as much as they can get away with and pay other employees as little as they can get away with. Sad but true.
@@songhan1586 Its impossible for YOU to do that. It takes the efforts of 1000s of people to 10x a companies value. And they and the stockholders should all benefit from it in a big way.
@@johnnynephrite6147 But shareholders did benefit massively, the company valuation 10x, so did the employees who got paid in equity as well. Tesla minted many employee millionaires even from normal line workers
@@songhan1586 The CEO isn't some kind of wizard. It's all employees that make it happen by working together.
Who tf has to pay the lawyers $18bn??
Talk about unfair compensation.
Shareholders
So they don’t want Elon to get billions but they want lawyers to?😂
The shareholders, unless this rediculous judgment is reversed on appeal.
Contingency-based compensation. If they lose they get nothing, if they win they get something like 1/3 of the judgment.
This was absolutely one of your best yet, very informative even outside of Tesla
Agreed. The details on the nature of the Delaware Court of Chancery, and the historical logic of stock options with historical examples of how it went wrong was a great education. I also appreciated the focus that Patrick did on the nature of the ruling, ie, not so much about the amount, but the process of rubber stamping and failed disclosure as well as some of the counterargument that Judge McCormick provided in relation to Musk's time spent at Tesla.
Patrick dragging Elmo …always here for it
Anti-American as always
@@leogir1518 pretty sure they sold out long ago, pre2016
@@leogir1518Hope he sees this bro
Patrick has an obsessive hate of Elon. It's been going on for years. Patrick and Jake Broe are full of bile and lose all objectivity with their naked hate of the man. It's so sad.
Phillip.
@@philliptemple9841found the Muskrat.
I remember when this pay package was created years ago that he could juice the stock enough to trigger the options-and he did. The P/E ratio is still much higher than competitors, but he has advertising power, so I knew he would try and juice that stock price to his advantage.
It also had revenue and production targets aside from that stock target.
So even if the stock could be manipulated that far somehow, it wouldn’t have been enough on its own.
There are no competitors of significance to Tesla.
Right... juice the stock.. Musk worked his ass off on the model 3 at the time and the only thing he squeezed was the massive short sellers who were so sure Tesla was going bankrupt and constantly put out FUD and hate pieces on Elon to disparage Tesla and Elon.
Serious question: what does "juice the stock" mean?
@@chuckschillingvideos
Not Tesla problem any more than Microsoft’s.
I'm glad you mentioned "The Common Sense Skeptic".
Incorporating in Texas is just the peak of, "I'm taking my ball and going home," only Elon doesn't actually own the ball and has to ask a bunch of people if he's allowed to
Even chance that he can.
And Musk basically is Tesla.
Remove him and much of the faith in it would crash.
Can Tesla shareholders sue those lawyers for damages since Tesla has to pay them? Tesla would not be where it is without Musk and his ability to attract a great team. Shareholders voted on the pay package regardless of knowing if the compensation committee worked with musk or not. If there is any connection between the judge and the law firm getting some huge payout on the shareholders behalf, which is obscene since shareholders want Musk at Tesla and think he deserves that payout since he made those shares valuable through extraordinary effort. Compare Musk's genius and work ethic vs any other CEO and compare the fundamental value created by the technologies at Tesla. Tesla isn't some pump and dump like Nikola or other BS companies. Perhaps the payout should be proportional to the value of the 9 shares represented in the case or any loss that shareholder had (negative loss?)
Including your ad, 5 commercials were part of this video. Hope YT gives you a good cut
You don’t have to hope that’s the business model he will get it
RUclips premium ftw
Some folk have to work for a living.
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A guy who had nine shares ended up taking down Elon Musk by demanding accountability.
Well, he's a thrash metal drummer, so there's that..
Took him down? Er ripped him off you mean?
Phillip.
Not all heroes wear capes, or in this case, sleeves.
@@philliptemple9841 Musk is a fool and has done nothing but ruin the reputation and value of Tesla. Techbro billionaires aren't real businessmen; they're just lotto winners. Musk put his unearned wealth into a rocket company and pretending to found an electric car company, so there are worse ways he could have blown it. Still, his inexperience and arrogance have finally come back to bite him.
no by being a dick. every shareholder who had shares from the start made a fortune. only real investors should matter.
@14:00. The corporations law professor I had in 1992 told the class that it was California's and Wisconsin's government employees' retirement fund managers who were demanding corporations compensate executives by stock options. He said the motivation was comparing the new massive growth in stock prices of computer hardware and software companies with the long established corporations' lack of stock price movement. The managers wanted the old corporations to be like the new market newbie corporations with respect to stock price growth. They believed the carrot to get them to focus on stock price growth was to make their compensation dependent on stock price growth. This of course allowed all the scammers on Wall Street into the board room to consult on their tried and true methods for stock price manipulation (as well as Steve Job's famous backdating of stock option grants).
Tesla deal was based on production out put, sales, earnings and so on. It was not based on pure share value. Tesla earning per share increased by 400 times during that period.
I know the Elon hate is fun, but really he took an absurd "all or nothing" package that everyone thought was an idiotic bet by him back then. Neither here nor there though: a single judge threw out the will of the board and shareholders. It's a violation of the autonomy of these corporations simply because the tremendous gains (bordering on bankruptcy to millions of cars and other lines of business) resulted in a huge number. This will make every corporation incorporated in Delaware reconsider whether they want to be there. Delaware doesn't have much else going for it besides corporate tax law/security.
Corprations by definition are not autonomous. They are as autonomous as Elon's self driving taxis. Built and designed by humans, and sometimes works for the common good, but not always. There is an implicit contract between the corporate officers and shareholders. They can't mislead shareholders about facts pertinent to a decision they are being asked to make. Musk and the Board did that. So he got caught. Stupid is as stupid does.
No, it won’t, because every other business incorporated in Delaware has a basic comprehension of how to cleanse interested party transactions to avoid entire fairness review (which has been the standard for *decades*) or, at the very least, enough sense to include indicia of fair dealing in their exorbitant comp packages. Elon was practically begging to be sued by flaunting such basic standards on such a big deal, nobody else would have done it this way because everyone else in DE knows better.
It sounds like Delaware offers a lot more minority shareholder protection. Why would the shareholders want more CEO protection.
The possibility that the court can strip Musk’s $55 billion (ostensibly to protect the shareholders), but then “allow” the attorneys to walk away with nearly half of that bag seems ironic at least and unethically wrong at worst.
I'm curious where that money is going to come from. Since Musk's stock options were voided, will Tesla be forced to create $19B worth of shares to give the lawyers?
He hadnt been paid. It was the legal status of the decision that what question. And after all, any agreement is only as legal as the law says it is.
Yeah there's no way the court will let the lawyers walk away with that much.
Plus Tesla would still need to compensate Musk as they would have paid him nothing for years of work.
yup clown world, what did the lawyers provide to the shareholders? what did elon provide? 10x increase in company value from 60b to 600b, but a compensation of 55bil is to much? what a joke a court system. the only reason they going after him is because he wont sell out and be controlled by them and is for freedom of speech. Its all about what he did with Twitter
He has pumped up the value of Tesla. The question is, how much of that pump was based on Elon's BS promises?
All of it.
Yeah, it's pretty sickening
He sold over 1.3 million Model y cars last year. If anything, the stock is low because liberal media hates Musk for speaking out against Nazi Biden’s administration.
Why do you care? He delivered both the price, the earnings and the revenues
@@aimlesfezthe most honest answer I can give you is, personally, it is an interesting study of mass manufacturing economics, the stock market, technology, social media, internet culture, human psychology and more.. the fact is a lot of investment has been made on the back of his vain school boyish future tech promises/ insistances and maybe hew over the curve now
Partick Boyle is the GOAT.
"Man can not live on stock options alone",
"Elon Musk's Giga-grant from Tesla"
incorporate in texas wont solve anything. why do you think all the big tech are incorporated in delaware.
Elon doesn't know either. Due to the last few years of state politics in Texas, it's stereotyped as everything lefties hate.
Because in Delaware they pay / collaborate with Democrats.
Texas is the new pay / collaborate with Republicans.
@@stapleman007abusing the legal system to persecute someone based on their politics ? Naaa.😅😅😂 😅 😅
Its really not even a real state.. its a hub for hiding things like burisma...
@@stapleman007 that’s not how that works
Early 80s real estate RUclips was the best
Sawyer Merritt:
For the Judge in this ruling to suggest shareholders were not aware of the close relationship between Elon and some of the Tesla Board members is simply ridiculous. I (and many others) knew exactly what we were voting on in 2018 and why. We approved an extremely ambitious compensation plan that gave Elon no guaranteed compensation of any kind - no salary, no cash bonuses, and no equity that vests simply by the passage of time. Instead, Elon's only compensation would be a 100% at-risk performance award, which ensured that he would be compensated only if Tesla and all of its shareholders did extraordinarily well. I would approve it all over again if I had to.
This compensation package couldn't be gamed by Elon. He had to hit extremely difficult market cap and revenue milestones to get any of these tranches. And then if he did hit those tough targets, he couldn't sell the shares from the package for 5 years once exercised.
So many "experts", Wall Street types, etc, laughed at Elon and Tesla in 2018 and said these market cap milestones were impossible. Elon then delivered on them. Tesla stock is up 10x since the 2018 compensation package was announced, and revenue up 9x.
Everybody is equally "expert" at law. Law is ultimately BULLSHIT since it is pure APPEAL TO AUTHORITY.
Tough shit -- shareholders all agreed to let this judge BLOCK Musk getting paid billions for doing nothing.
If government wanted to, it could PAY ALL USEFUL WORKERS billions of dollars instead.
yeah, for sure. i remember when the 1st time he snapped back at a market analyst on a quarterly market call, paraphrasing was like
“so, elon, are you saying you going to hit your numbers this quarter?”
he responded like “is that all you care about … money? what is your soul worth?! asshole”. and hung up hahaha
4real tho it sucks he didn’t have a true mentor on the team (or an AI with enough foresight) to anticipate this, that he’d succeed 💯 beyond wildest dreams & still have to hold up to scrutiny of basic management 101 principles, freedom from conflict of interest , duty of care, duty of prudence ..
he is like 4 yrs behind on soaceX tho loolll
@mipmipmipmipmip hahahahahah you are joking right???? If you aren't you don't know how accounting works in this area of business. BTW the package was designed to prevent any gaming of the stock price, revenues and etc. Ask anyone that knows what they are talking about.
You sound like a cultist. You only knew what you were told, and you weren't told everything. It was the right decision because, obviously in your case, the law is that shareholders have the right and the need to have all the pertinent information about any decision they are asked to make. Elon and the Board witheld pertinent information frim the shareholders, and they were found out. It doesnt matter if hes a cult leader, the law still applies.
@@tonespeaksYeah, right. Why would anyone game the stock. Its not as if Musk hasn't.
You can't use hindsight for valuation. That's ridiculous.
The most ridiculous part is that even Elmo's brother is in the board. Lmaoooo
His brother is on the board because he was the CEO of solar city, which was purchased for its distribution network and patents nearly a decade ago.
@@skyfall-1738a purchase that was already controversial given it merited its own mention in the video.
@@skyfall-1738 The same brother who said in court that he didn't know Elmo was going to buy solar city. Sure.
@@the0ne809 Nepotism is good for business
can you do a video about BaltCap?
This explained way more than the title promised. Excellent.
$56 Billion is like a person earning $56,000 per year (decent money in most of the US) for ONE MILLION YEARS!
This is how the machine deals with people who tilt at it.
Remember, Elon doesn't do it for the money. 🙄
It depends if money is the goal, or a means.
Cool. Give up billions and be cool with it. He still worked for it.
@@SamDisher001 No he didn't lol. You are genuinely insane if you think anyone in the world works hard enough to earn the lifetime earnings of a medium sized village
Ford making automobiles affordable for everyone. Edison creating the first electrical grid. Fritz Haber inventing artificial fertilizer increasing food security for billions. Yes there are people who's contribution to humanity are worth more than a million workers.@@unluckygamer692
@@unluckygamer692 you do know the value of the shares were much smaller when the compensation was proposed, right?
The episode premiere hasn’t started yet, and I love it off the thumbnail alone 😂
I'm here for realistic Ketamine bloated Elon
@@CarShopping101 by this South African tub of lard we are saved, we are delivered!
Thank you for being there, Patrick.
Your mixture of fact, analysis, irony and lore is perfect.
“Show me the incentive and I will show you the outcome.” - Charlie Munger
that pay package was greater than all Tesla earnings in its history combined
And still much smaller than how much the stock value has grown since they first agreed on this compensation package.
Imagine mary barra agreeing to a compensation plan where she would get nothing if the stock stays stagnant. Obviosuly she would never accept such a thing
@@slopedarmor The company has begun to slide. The guy isn't worth any of this money. Period.
@@slopedarmor tesla stock have been under performing the end of 2021. He doesnt deserve that compensation since all of his major promises to shareholders have been underdelivered (FSD, robotaxi, energy, solar, CT, Semi, 4680 and the 25K car).
He should take his head out of his rear end and start concentrating on growing the business instead of acting like a narcissistic man child
@@greenearth9945
Musk was not rewarded on share value. He was given a larger share of the company if he was to increase sales, profits and so on. What he managed was amazing performance.
@@slopedarmorI think that is the greater problem too. Stock values that are weirdly detached from other company performances. Like the main output of the tech companies is stock value.
I think that some people forget what taking a company *public* actually means and how the founder being involved must change because they are using public investment to support the company.
If Musk wants absolute control of Tesla, then he’s more than welcome to take it private.
The problem with your assertion: Musk isn't attempting to assume "absolute control" of Tesla.
But cool story, bro.
@@TheThriftShopSampler the problem with your assertion is that you did not understand the nuance of what I said.
You could have asked me to elaborate because this forum is meant for brief comments and not a dissertation and that is how my initial comment was to be understood.
But cool response, bro.
This is so timely, as i listened to your podcast this morning about Twitter going broke. I need updates before i go home and whilst at job, so i subbed to the pod this morning. And here you are!
Finally a court in America makes a good decision.
It is not a good decision Musk took a small workshop company to a billion dollar manufacturing company. He increased earnings per share over that period hundreds of times. If Delaware does not rectify this decision it will ruin their stable business image. Right now there is a series of freak outs happening with companies based there.
At the time that Musk was granted this compensation package Tesla had never made a dime and all of the financial talking heads were laughing at the compensation package and predicting the imminent demise of Tesla because the big boys were going to come and show Musk how to make electric cars. Now Tesla is a manufacturing powerhouse and the big boys are in a struggle to survive.
My 401k has done significantly better since retiring from Intel eight years ago and being able to select things other than mutual funds. The last sixteen years at Intel I never had a stock option that ever hit the strike price while the CEO who had a much better compensation package than I, was getting the company billion dollar plus fines for anticompetitive practices in Europe and Asia.
I feel Musk has earned it.
If he gets away with this you need to sell your Tesla stock immediately. Because it means he's using Tesla as his personal ATM. Is there a car platform is 5 years old they need to be spending that money updating their tech. If they don't do that then they're going to get eaten alive by competition in the next 6 years and then those government subsidies that make them profitable will go away.
19:50 to 20:25 pure Patrick classic. Worth putting that on a loop. =)))
I genuinely worry about the Musk fanboys. All these guys probably pride themselves on valuing Logic and Reason, and yet they buy into the lies of this futuristic fantasist.
They don't explain the 7.5% tax. They lied about it by obscuring it in their promotions... As usual
I’d love to see the justification for the $56bn bonus.
Company loses 70% of its value over 2 years. The biggest corporate loss of all time.
A company that has made $25bn profit for its entire history of operation.
Yep, sounds like a reasonable payment, $56bn of investor money. Nothing wrong with that.
It's like these companies wants to be the eternal startup.
God! That is a wonderful thumbnail! Appreciate the humour and the info!
God! Log off and touch some grass!
@@Matt67012 not a grass pervert. Won't be doing that.
@@Matt67012 Musk isn't your pal, he neither knows nor cares that you even exist, he's not going to give you a pony. You don't need to reflexively stand up for the serial liar. But of course you will.....
Musk is playing a wonderful game of "let's see who has bigger balls" and sadly the only ones who will feel the pain are the ones who believe in him unconditionally.
Would Elon spending more time on Tesla be a benefit or a drawback to Tesla value?
Patrick you failed to highlight what Musk had to deliver to receive the stock. The deliverables were quick challenging and made all the Tesla stock holders a great deal of money.
I think a lot of these blokes are rewarded for hyping up stock value, to the point where stock value is strangely detached. Like a collection of eternal startups.
9 share slap in Elon's face.
CEO pay doesn't reflect their value to the business.
One important aspect was not mentioned in connection with Musk’s compensation package. The conditions/milestones for the options and how risky it was for him, because the milestones seemed unachievable and he would get nothing unless they achieve the milestones
No, they want to evaluate this in hindsight. It's like betting on a football game after it's played.
This lawsuit was originally filed in 2018, shortly after the pay package was approved. It was not filed after all 12 milestones were met.
One of the things argued in the trial was that in addition to the board's lack of independence, it also had internal projections showing the conditions/milestones were less risky what they presented to the shareholders.
@@jameslake7775 The judgement was 100% evaluated in hindsight. There is no reference to a grant date valuation. Thus, fairness was not appropriately considered.
The Feb 2018 proxy statement includes a copy of the comp agreement. As someone that values such things for a living, the comp arrangement was sufficiently disclosed to solicit approval. I could value the arrangement with publicly available information at the time. We don't rely on company estimates.
The judge has no business opining on the facts of the case. The facts she considered are simply irrelevant. The issues are well outside of her area of expertise.
It is obvious from the wording of the opinion, that it was a political decision, political statement. I hope the superior court has not been infiltrated yet.
18:00 The way I heard it, requiring disclosure of top officer pay also contributed to the rocketing of that pay. Regulators thought it would have a “name and shame” effect, but what really happened was execs could see their peers’ pay and demanded more.
*"And it's likely that the company will need new independent directors" ... Sure. Perhaps Elon will even allow X Æ A-Xii to conduct the due diligence for suitable candidates.* 😂
Why is musk acting so fishy? Is he spiraling out of control?
Excellent Information! I think you clearly observe the American system which is not always the case for media in the US.
Don't forget that media are owned by rich families that want to "educate" you... Like how half of america think that thhethe biggest problem in the world is immigration while the other half think it is racism... It takes decaades of propaganda to brainwash people like that...
It seems like roughly speaking, his pay was ... Twitter. Which is amusing incentive. "Do a good job hyping the stock on Twitter and we'll buy it for you."
Maybe it's just because I'm not used to the vocabulary of he business world, but the use of "compensation" to describe someone essentially rewarding themselves for continuing to run a company they were probably going to carry on running anyway is a bit odd. If only we'd known it was such a burden.
I think what's most galling about this is how divorced this "compensation" is from performance. I've seen that before. If you're in charge and the company does well, of course, you get a big bonus. But if you're in charge and the company does poorly, you get the same bonus for "steering us through chopping financial waters" or whatever.
this comp package forced the stock to grow and stay at 650b for, if a remember correctly, at leats 2 years, i think. it also had to grow the revenew. So no, he wouldn't have been paid if the company had done poorly.
It's a tax dodge. CEOs don't get insanely high salaries as these are taxed. Instead they get 'compensation' in stocks and dividends, which are taxed less or even not at all when structured properly. Scumbags the lot of them.
You nailed It! These very wealthy dud's are averse to paying tax@@Garthdon
@@Garthdonnot all of them. Check out the chap that musk was mocking when the guy couldn’t find out if he was being let go. The guy is genuinely disabled and when Twitter originally bought out his company he structured the deal so he paid all the tax in his native country and way more that he could have done had he been less of a decent guy. His name is Haraldur “Halli” Thorleifsson and sounds like a thoroughly decent bloke unlike musk who went on a Twitter trolling session against the guy casting doubt on his disability and saying he did nothing at the company. Musk ended up tweeting an apology of sorts as Hallie had a severance cause in his contract that would have cost Twitter a hell of a lot of money, in addition to a very expensive law suit about disability discrimination.
Im a stockholder since 2016 Elon created so much value for me and other stockholders and should be rewarded for it. I voted for the package because it was good. It only gave compensation for giants returns which were delivered. Try and read some of the judges statement it's clear it was an activist judge. There is a reason why all the stockholders are angry, this judgement is against stockholders, freedom and capitalism.
55 billions CEO pay, whatever the form it takes, is so high that it basically endangers Tesla. Its no longer a "golden parachute", its a golden Zeppelin.
We need a flaming Hindenburg emoji.
golden parachute is for when a ceo is fired. His comp package required to maitain the stock value for 2 years at 650 billion ( i don't really remember the time horizon they set, but it was long) and growing revenues. Definitely not a golden parachute.
The terms of his comp package was basically “if Tesla stock goes up 11x I get 10% ownership but if it doesn’t I don’t get paid”. Most people thought it was a joke but if he succeeded they’d be over the moon because their investment went up 11x. Now a liberal activist judge took on a joke of a lawsuit and says it’s subjectively unfair so it’s all scrapped.
@@---jj9lfMusk hinted he would leave Tesla if he did not get more voting power. 55B seemed like a vampire bite before leaving the Tesla body cold and dead. It really looks like it was a parting package, whatever he says
I very much enjoy listening to your commentary, thank you so much. I found you by accident and have spent the last 3 hours binging you, very, very interesting.
Greed!
Whether the Tesla board was wrong or right to make this offer, Musk shouldn't have requested it.
Once you go public, it's not your money anymore.
BOYLE IS THE FIN CONTENT G.O.A.T. 💰💯☘️🔥
We need a Delaware deep dive
One of the historical reasons for incorporating in Delaware was it's hands off approach to business organization and management.
Depth and breadth
They've already got their bill. I say they lost about 1 billion dollars in taxes each year because of this single wrong judgement of this single female judge who was only following what her boss, Joe "Geezer" Biden told her. I am sure the government of Delaware is utlimately happy with her and him.
@@TheIndianaGeoffyeah, not anymore. Good luck while the business world tells Delaware to fck off
when delaware say the board isn't acting in shareholder interest, run!
But let's be honest how? Because they agreed to pay a wage based on growth? The 55B is around 9% of the value created, I don't understand the rhetoric of lack of disclosure of relationships, when the board properly disclosed the pay package, that is all that matters...
>Ohh no, we are being robbed
>Let's pay 19billion to our lawyers from the company that we say are robbing us
Ahh yes, that makes total sense
@@rui518
It was not a wage it was a share of the company. Musk was offering a great share if he could meet certain targets such as sales and profits and he smashed those targets. People are focused on the raw number when they should be focused on the size of the company he was gaining which was 10%. Musk could liquidate his share. And go do something else and people can just drive their normal petrol car.
If your a private company pay yourself whatever you like…if your a publicly traded company it’s frankly ridiculous that you think u should be payed $55 billion..
You’re and paid.
The court did the right thing. The reason companies incorporate in Delaware is because of the strong shareholder protections which makes it easier to raise capital and sell shares. He can not change the state of corporation without the approval of the shareholders which would be a stupid thing to do. If Elon thinks the pay package is appropriate then he should let the shareholders decide at the annual meeting
rhe problem with the "Elon is Magic so we gotta give him whatever it takes" is that more and more people are disagreeeing with that, and that disagreement itself is becoming a public spectacle, and that kills his magic. It's based on the belief that he can bend the world to his vision, and that ain't happening here.
His magic is he builds huge companies against the odds. You’re an idiot.
That ain’t it. The comp package was crazy because it was based on moonshot tranches. Nobody thought he could 10x the company. He did. Then the lawyers smelt blood and launched a bullshit lawsuit.
The best part about Elon is that he's stupid enough to be stupid in full view. Zuckerberg and the Metaverse or Thiel trusting quacks is still there.
I think of Steve Jobs as the bloke who made himself into a guru brand, to the point where his work was partly to appear on talks and be the Steve Jobs brand.
Patrick provided a fair assesment of the situation as always. But if this was supposed to be a lawsuit that should have benefited shareholders then why all the Musk haters are cheering and all the Tesla shareholders are angry?
Because it's a cult of personality.
Tesla shareholders are not angry, that’s something you made up. Musk has been sued more than once by tesla shareholders.
@@autoteleologybeat me to it. Logic does not apply to the fanboys.
I'm not a Tesla share holder, but I'm not a fan of government meddling. If my investment is bad then so be it. I'd rather lose money than the government intervene and try to force someone to make my investment better.
Govt meddling in the company I invested just seems like trouble even if its "for my benefit".
@@marc-andremichaud1251 Seems you did not watch the video. The situation is that Musk and Board of Directors were not disclosing information the shareholders have a right to. The government in this case was not protecting investors from making a bad choice, they're protecting investors rights to be informed. But I dunno, maybe you like to be swindled.
Beware any company where leadership compensation is not linked to performance
But in this case, it IS linked to performance
@@user-xl5kd6il6c Do you mean performance of his self-marketing? He wrote the terms and no BoD approved it. Guys like you will argue all day long that sheisters like Elon deserve to own the planet, just because.
Lucid Motors..
@@doodlebug1820
Metric used as part of Musk share offers were sales, revenue,profits and production outputs.
Thank you for this illuminating video regarding CEO options/compensation and the advantages of incorporation in Delaware. Double thumbs up.
No excessive pay package for the lawyers, representing the plaintiffs LMFAO
Was waiting for this! I wait for Patrick's videos the same way I used to wait for the LOTR movies. 😂
Imagine being payed more in a week than most people will see in a lifetime but that is not “motivational” enough to make you work hard.
just to be clear, by most you mean more than 99.9% of everyone who ever lived.
Elon is only paid minimum wage!
He gets stock options based on several requirements which guarantee that the stock owners always earn more than Musk.
Elon continues to start amazing companies but he keeps them private because it is just not worth the drama and lies to make the companies public.
This is our loss.
When did that happen?
@@thedalillama $55.8 billion divided by the 10 years the plan was supposed to run for works out to $107 million per week.
@@jameslake7775 $55.8 billion is a delusive amount. The compensation package was worth less than $1 billion when it was approved by shareholders.
What the compensation package later appreciated to is irrelevant. It's a bit like betting on a football game after it's over.
It's sad how easy it is to persuade the general public with irrelevant information. You appear to be a classic example of someone that believes they have an above-average IQ yet you don't have the capacity to process relevant information. You are in good company though, the judge has your same level of intellect.
Elon, what a transformation. 5 years ago, he was Tony Stark, loved by environmentalists, clean fuel/Save the Planet, Dem party. Now he's hated by both sides, 😂, Texas still won't let Tesla sell EVs in the state! Despite putting the largest 🚗 factory in USA near Austin.
No we just hate the Dems, not Elon
See, most CEOs keep their dirty dealings on the down-low. Elon had to broadcast his whackadoodlery to the whole world because 'reasons'. Had he just kept his mouth shut about vaccines, the 2020 election, workers' rights, employment discrimination, and climate denialism, he'd still be beloved. He could've been a greedy Republi-scammer behind the scenes while garnering money and support from people he's diametrically opposed to. Why he ever thought it'd be a good idea to flip off both sides instead of play both sides (like most CEOs do) is beyond me. Worst financial decision he ever made.
Everyone finally realizing he's a narcissistic scum bag/ketamine addicted fraud and pathological liar
I seen through him right from the start ,now just kicking back and watching the house of cars crumble .
Texas has a strong dealer lobby. Its not easy to remove the strong lobby/mafia of each state.
Full self driving next year... Full self driving next year... Full self driving next year... Full self driving next year...
“One dollar a year, which was below minimum wage at the time”