A pass judgement on has officially approved a agreement in a case filed through Tesla shareholders opposed to board members who will now have to go back shares, money and waive inventory features value a overall of just about $1 billion.
Let me start this article with a quote from Tesla CEO Elon Musk:
Tesla will never settle an issue we’re on, and it will never dispute a case we’re wrong on.
Today, Foreign Minister Kathaleen McCormick approved an agreement of agreement between Tesla and all its members of the Board of Directors from 2017 to 2020 and the Pension Formula for the Police and the fires of the city of Detroit on behalf of the Tesla shareholders on what Shareholders on shareholders’ shareholders. Higher compensation.
The agreement was first reported in July 2023, but it is only now being officially approved and we learn a few more details.
The shareholder idea that Tesla’s Board of Trustees members were excessively supported by a lot of millions of dollars between 2017 and 2020, when the average compensation of a Company S Board member
Under the regulations, Board members agree to return to Tesla $277 million in cash, $459 million in percentage of acquiring features, and giving up $184 million in features for the allocated percentage purchase features for 2021-2023.
That adds up to nearly $1 billion.
The board members include Kimbal Musk, Elon’s brother, Brad Buss, Ira Ehrenpreis, Antonio Gracias, Stephen Jurvetson, all close friends of Elon Musk and people who have financial dealings with Musk outside of Tesla, Linda Johnson Rice, Kathleen Wilson-Thompson, Hiromichi Mizuno and Larry Ellison, the co-founder of Oracle Corp and also a close friend of Musk.
Even if you believe that Tesla’s value is driven by an insanely talented executive team, and even if you believe that team deserves outsized compensation as a result, the Board has little/nothing to do with the operational activities that drive the company’s success. Looking after an audit committee is just not that significant a role in the company’s valuation. In fact, you could argue that the board over at Nikola deserves the big bucks! After all, they were exposed to the liability of Trevor Milton and tasked with trying to corral a CEO who lied incessantly and misled shareholders, regulators, and the public and made ridiculous claims about his product’s capabilities and… okay bad example. You get the point. Boards are not worth that much.
Within the framework of the regulation, Tesla or the Board of Directors admits any reprehensible act.
Musk didn’t take compensation as part of the board, but he is embroiled in a similar case over his own $55 billion CEO compensation package, which was rescinded by the same judge after she found that it wasn’t negotiated or presented to shareholders in good faith.
The board members who received this “excessive compensation” also happened to be the one who “negotiated” Musk’s CEO compensation package.
The case is addressed to the Supreme Court of Delaware, as reported above today.
Fred is the Editor in Chief and Main Writer at Electrek.
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