Re:Tesla's biggest retail shareholder is voting against Elon...
by croes on Sunday April 21, 2024 @02:54PM
(#40108199)
>The Court found that the stockholder vote approving Musk’s Grant was not fully informed for two reasons:
>the Proxy inaccurately described key directors as independent, when several of them had extensive personal and professional relationships of long duration with Musk, including owing much of their personal wealth to Musk;
>the Proxy misleadingly omitted details about the process by which Musk’s Grant was approved, including material preliminary conversations between Musk and the Compensation Committee chairman, as well as Musk’s role in setting the terms of the Grant and the timing of the Committee’s work.
>In addition to the process of approving the Grant, the Court considered its “price.” “The Board never asked the $55.8 billion question: Was the plan even necessary for Tesla to retain Musk and achieve its goals?” The Court concluded that it was not for three key reasons:
>Musk already owned 21.9% of Tesla, which ownership stake gave him incentive to push Tesla to grow its market capitalization even without the additional compensation;
>There was no risk that Musk would depart Tesla without receiving the Grant, nor did the Board condition the package on Musk devoting any set amount of time to Tesla;
>the Grant’s performance conditions were not, in fact, ambitious and difficult to achieve.
>the Proxy inaccurately described key directors as independent, when several of them had extensive personal and professional relationships of long duration with Musk, including owing much of their personal wealth to Musk;
>the Proxy misleadingly omitted details about the process by which Musk’s Grant was approved, including material preliminary conversations between Musk and the Compensation Committee chairman, as well as Musk’s role in setting the terms of the Grant and the timing of the Committee’s work.
>In addition to the process of approving the Grant, the Court considered its “price.” “The Board never asked the $55.8 billion question: Was the plan even necessary for Tesla to retain Musk and achieve its goals?” The Court concluded that it was not for three key reasons:
>Musk already owned 21.9% of Tesla, which ownership stake gave him incentive to push Tesla to grow its market capitalization even without the additional compensation;
>There was no risk that Musk would depart Tesla without receiving the Grant, nor did the Board condition the package on Musk devoting any set amount of time to Tesla;
>the Grant’s performance conditions were not, in fact, ambitious and difficult to achieve.