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Tesla BoD Excessive Pay Case

Digressions

Junior
Feb 9, 2017
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There have been other cases brought by shareholders vs Musk himself. What are your thoughts on the amount of compensation?

What are your thoughts on the ability (or lack thereof) of shareholders to have a say wrt compensation?

Does a BoD position warrant that type of compensation? If so, how should nepotism be addressed? If it’s important enough to warrant that much pay, shouldn't there be more of a responsibility to shareholders to find people who add value to the company? How would you feel if a few of those names were replaced with Peyton Manning, Dolly Parton, and Hunter Biden?
 

There have been other cases brought by shareholders vs Musk himself. What are your thoughts on the amount of compensation?

What are your thoughts on the ability (or lack thereof) of shareholders to have a say wrt compensation?

Does a BoD position warrant that type of compensation? If so, how should nepotism be addressed? If it’s important enough to warrant that much pay, shouldn't there be more of a responsibility to shareholders to find people who add value to the company? How would you feel if a few of those names were replaced with Peyton Manning, Dolly Parton, and Hunter Biden?

On the amounts:
I suppose it depends on what their contracts stated. Board positions are contracted positions with specified terms. If the value of TSLA's stock appreciated more than anyone could imagine, I don't necessarily see why shareholders should be pissed, given they are sharing in that upside. The nominal payouts might be significantly larger than normal, but does that matter if the stock appreciated far more and quicker than normal?

Nepotism:
I've always hated Nepotism, but admittedly, that's partly biased as none of my family were in positions of substance, significance or wealth and could impact my hiring. Additionally, most of the firms I've worked for had a stated "No Nepotism" policy whereby you could not refer or employ family members.

Board Makeup:
All that said, I hadn't even heard of Musk's brother before, but the guy was pretty damn successful in his own right. I'm not familiar enough with him, the rest of Tesla's board or what it was seeking for Board Members (meaning candidates and their skillsets), but he was far more qualified than a relative of a diplomat or politician (Hunter Biden).

I wouldn't necessarily dismiss a celebrity from a board position, but I would hope those in charge of recruiting and shareholders would seek the best candidates. In some cases, Peyton Manning or Dolly Parton may be beneficial for marketing reasons (e.g., Dolly and Victoria's Secret), but I hope those in charge would have seriously considered those facts during the process.
 
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On the amounts:
I suppose it depends on what their contracts stated. Board positions are contracted positions with specified terms. If the value of TSLA's stock appreciated more than anyone could imagine, I don't necessarily see why shareholders should be pissed, given they are sharing in that upside. The nominal payouts might be significantly larger than normal, but does that matter if the stock appreciated far more and quicker than normal?

Nepotism:
I've always hated Nepotism, but admittedly, that's partly biased as none of my family were in positions of substance, significance or wealth and could impact my hiring. Additionally, most of the firms I've worked for had a stated "No Nepotism" policy whereby you could not refer or employ family members.

Board Makeup:
All that said, I hadn't even heard of Musk's brother before, but the guy was pretty damn successful in his own right. I'm not familiar enough with him, the rest of Tesla's board or what it was seeking for Board Members (meaning candidates and their skillsets), but he was far more qualified than a relative of a diplomat or politician (Hunter Biden).

I wouldn't necessarily dismiss a celebrity from a board position, but I would hope those in charge of recruiting and shareholders would seek the best candidates. In some cases, Peyton Manning or Dolly Parton may be beneficial for marketing reasons (e.g., Dolly and Victoria's Secret), but I hope those in charge would have seriously considered those facts during the process.
Wrt meritocracy, when is it okay to ask, "is that guy really worth it?" We always view it from the other direction. Some of these people sit on 5 boards. That’s a lot of jack for something that can be done at a 20% clip.

Also, I have a lot more sympathy for people who have started their own company. Elon, Bezos, Zuckerberg, they had a vision... a dream. To the moon. They are the company.

People like Lee Raymond (my all-time CEO villian) aren't special. He didn’t invent oil. He didn't invent a new use for oil. He took other people's money and bought oil reserves (poorly I would add). Hard to justify billions for that. If we live in a meritocracy and someone justifies that, they don’t hold themselves in high enough esteem.
 
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There have been other cases brought by shareholders vs Musk himself. What are your thoughts on the amount of compensation?

What are your thoughts on the ability (or lack thereof) of shareholders to have a say wrt compensation?

Does a BoD position warrant that type of compensation? If so, how should nepotism be addressed? If it’s important enough to warrant that much pay, shouldn't there be more of a responsibility to shareholders to find people who add value to the company? How would you feel if a few of those names were replaced with Peyton Manning, Dolly Parton, and Hunter Biden?
Wrt meritocracy, when is it okay to ask, "is that guy really worth it?" We always view it from the other direction. Some of these people sit on 5 boards. That’s a lot of jack for something that can be done at a 20% clip.

Also, I have a lot more sympathy for people who have started their own company. Elon, Bezos, Zuckerberg, they had a vision... a dream. To the moon. They are the company.

People like Lee Raymond (my all-time CEO villian) aren't special. He didn’t invent oil. He didn't invent a new use for oil. He took other people's money and bought oil reserves (poorly I would add). Hard to justify billions for that. If we live in a meritocracy and someone justifies that, they don’t hold themselves in high enough esteem.
Feel the same about founders. 👍
 
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