Protects 1/3 of the shareholders vs 2/3 of the ones that voted Yes 
You are right, it is not the Judge’s job. It was the company’s job to show that the pay package was fair and complied with the law. They failed to do that. Instead they tried to ‘ratify’ the pay package, which obviously doesn’t do anything to show that the pay package met the laws, only that they got some shareholders to vote in favour of it.
Well, it protected 1/3 with brains and protected 2/3 from their own stupidity.
I read somewhere that the size of the pay package is enough to pay for all the Fortune 500 CEOs (not know for being paid poorly) including bonuses and stock programs… not just for 1 year, but for 10 years.
Maybe Musk will throw a tantrum and quit. Fine, I think they’d find a better CEO and one that costs a lot less too.
Forecasts are just that. For every forecast that was masisvely surpassed you’ll find any number that was not met.
Otherwise the market cap wouldn’t have been what it was, and the market caps of fledgeling companies would be what they’ll be in a few years.
Which is not the job of a judge, even if this was the case.
Actually, the ruling was that Elon and his lawyers failed to prove it was fair to the corporation.
As I remember the situation was that Elon said give me $50 billion or I will spend my time elsewhere which, to me, sounds more like extortion than a fair process.
Actually he seems to be spending all his time on Twitter or with Trump.
If the company could’t afford to see him walk then, indeed, he is worth that. Nonetheless they were free to say No, this is how negotiotions work.
Agreed, the company needs a stable leader who won’t make spontaneous decisions like closing the electric charging division and will instead concentrate on marketing and selling this mature product.
Look, I have a very strong dislike for Elon and everything he stands for and represents. I am also convinced the board is most probably not as independent as it should be. What I am surprised about, as a non lawyer, is that the judge has decided to stand with a minority shareholder on “excessive pay” which it has no competence on, that’s all.
Nobody said it was. The judge did the job of looking at the evidence and applying the law.
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No, read her statement. McCormick, in her original ruling in February, said the Tesla board that approved the package six years ago was too cosy with Musk, and that her analysis of the grant — described as the “largest executive compensation award in the history of public markets” — showed it could not be justified on any reasonable metric.
In other words, she’s applying judgement in approving the package deeming its unreasonable. Its not about legality, its about her believing it is excessive and not in the best interest of shareholders.
Read what she said about the denial of the request of Bernstein Litowitz, which had represented the Tesla shareholder who brought the suit,
While conceding that “their methodology for calculating [the] figure is sound”, McCormick concluded: “In a case about excessive compensation, that was a bold ask.”
It’s not truly about excessive pay directly, but it hits on it. It’s more akin to ‘Musk colluded with a compliant/non-independent board to rip off shareholders by creating an inflated pay packet and not having proper negotiations on pay’. It was up to Musk/company to show that they established the pay package appropriately and they failed to do that.
The amount would not have been a problem had there really been an independent board who negotiated properly with Musk to get a fair pay deal. But I suspect had they really done that, the pay package would have been much smaller.
Read her own statement above McCormick concluded: “In a case about excessive compensation, that was a bold ask.”
Maybe read the judgement in context to understand it instead of picking up odd sentences to try to fit your pre-conceived notions.
Look, I am no lawyer and this is way out of my depth. I just expressed disbelief that a judge will decide what is excessive pay AFTER a 2/3 majority of shareholders voted yes. Thats all.
Read the actual February judgment where the judge wrote
“This post-trial decision enters judgment for the plaintiff, finding that the compensation plan is subject to review under the entire fairness standard, the defendants bore the burden of proving that the compensation plan was fair, and they failed to meet their burden”.
You can read the judgment here https://courts.delaware.gov/Opinions/Download.aspx?id=359340
I do not know where you are getting your information from but the phrase “excessive pay” does not exist in this 200-page ruling, maybe you are quoting an inaccurate newspaper report?
The judge ruled on the compensation plan, not the actual amount.
I have nothing more to add to this discussion.
Now you are trying to deliberately confuse us.
This had nothing to do with the ruling on Musk, it was taken from the ruling on the lawyer’s compensation which the judge reduced.
It was the minority shareholder who claimed the case was about excessive compensation which the judge quoted.
Just because shareholders vote it doesn’t mean it’s democracy.
In corporate law, there is a fiduciary duty of majority to minority shareholders. I don’t think this concept even exist in democracy where the winner with 51% tells the rest to f*** off.
So, fiduciary duty means acting in the best interest of the corporation, not taking advantage of their position of majority shareholders for personal benefit. In simpler terms, to meet the requirements of Delaware corporate law, a consensus is needed, not only a vote where a majority wins.