Tesla BoD Excessive Pay Case

[Digressions]

https://www.reuters.com/legal/judge-approves-tesla-directors-deal-end-excess-pay-case-2025-01-08/

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?

 

[JamieDimonsBalls]

https://www.reuters.com/legal/judge-approves-tesla-directors-deal-end-excess-pay-case-2025-01-08/

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.

 

[Digressions]

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.

 

[mcmurtry66]

https://www.reuters.com/legal/judge-approves-tesla-directors-deal-end-excess-pay-case-2025-01-08/

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. 👍

 

[larsIU]

Some of these people sit on 5 boards. That’s a lot of jack for something that can be done at a 20% clip.

I think the REASON they’re on those five boards is prescient.

People at those levels are either connections or overseers. It reminds me of European royalty intermarrying and shit. And that’s only what I’ve seen from my lowly perch.

 

[JamieDimonsBalls]

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.

It's always fine to question whether or not it is worth it. I'd argue that logically, it isn't likely that a board member made enough of an impact to garner $100+ million. However, what is owed should be governed by whatever was signed by both parties.

Sitting on five boards doesn't necessarily mean that someone is going to be making millions per year per board. Hundreds of thousands is probably expected, but remember that a fair amount of compensation is stock-based, and there are plenty fo times when stock options fail to vest because they are underwater. To me, scrutinizing the vesting levels and triggers is as important.

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.

Musk's brother started his own company too, but you seemed critical of his board appointment? I have a lot of respect for entrepreneurs, but they are often NOT the best business managers, which is why it is more rare to see them make it as long as Elon, Zuck, Bezos have.

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.

I don't know enough about Lee, specifically, but I think its narrow-minded to think that good leaders and good managers aren't important for many companies and their success. Inventing something is great, but commercializing it or growing and expanding is just as difficult, if not moreso. I've seen so much technology stall out because the entrepreneurs don't understand commercialization and how to take that next step and refuse to entrust their baby with someone who does.

 

[Digressions]

It's always fine to question whether or not it is worth it. I'd argue that logically, it isn't likely that a board member made enough of an impact to garner $100+ million. However, what is owed should be governed by whatever was signed by both parties.

Sitting on five boards doesn't necessarily mean that someone is going to be making millions per year per board. Hundreds of thousands is probably expected, but remember that a fair amount of compensation is stock-based, and there are plenty fo times when stock options fail to vest because they are underwater. To me, scrutinizing the vesting levels and triggers is as important.



Musk's brother started his own company too, but you seemed critical of his board appointment? I have a lot of respect for entrepreneurs, but they are often NOT the best business managers, which is why it is more rare to see them make it as long as Elon, Zuck, Bezos have.



I don't know enough about Lee, specifically, but I think its narrow-minded to think that good leaders and good managers aren't important for many companies and their success. Inventing something is great, but commercializing it or growing and expanding is just as difficult, if not moreso. I've seen so much technology stall out because the entrepreneurs don't understand commercialization and how to take that next step and refuse to entrust their baby with someone who does.

All good points. I wasn't trying to single out Musk's brother. He might be the whole brains of the operation with less ambition.

There was an issue the other day with my use of the words regressive/progressive. I understood the critique. Fair enough. And I understand why people dislike taxes imposed by our government. To me, it seems like people dismiss other "taxes" too often. Whether it be administrative costs in healthcare, or BoD/CEO compensation.

Not all companies are created equal. So, incorporating small/mid/large cap all together is not useful when determining comp. Given the MAGA impact of policy, how long will this type of compensation be the norm before there is more substantial pushback? When you have ~15% of the market being driven by 401ks, what's going to happen when tarrifs don't make the middle-class "better off"?

 

[UncleMark]

Inventing something is great, but commercializing it or growing and expanding is just as difficult, if not moreso. I've seen so much technology stall out because the entrepreneurs don't understand commercialization and how to take that next step and refuse to entrust their baby with someone who does.

Many times the "sharks" on Shark Tank take a pass not because the product or service is poor, but because the inventor/founder doesn't know what to do with it.