Elon Musk’s 2018 Tesla pay package musk be restored, Delaware supreme court rules

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Democracy wins again!

🍿

like it or not, the shareholders had a vote with all of the relevant information and still decided to ratify. I voted against, it but I don't see where the government has the right to step in on an internal matter.

Does this mean he gets the new pay package and the old one? That'd be funny.

The old one was for old goals, which he completed. New one involves a 10 year plan worth of goals. He’ll get both if he’s successful, but he’s already earned the first .

The judge that denied Elon pay. should have kept heR feeling out of it in the beginning. The guy who brought the case was a fraud . And she took his side . He should have to pay Elon lawyer fees.

A deal Is a deal. Payup

Anything happening in the US happens under the jurisdiction of the US govt…that’s kinda how govts work. Tesla’s board could have had a vote on assassinating key leadership of Faraday Future too, and I’ll bet you wouldn’t be arguing that murder should be an “internal matter”

There’s a reason why corporations incorporate in Delaware. Ultimately, they not going to do anything to threaten that.

Can you explain why you would vote against reapproving a plan that was already approved by shareholders and that he successfully achieved as originally agreed upon? Or, if you're talking about the original approval vote, why you'd be against approving a plan that dilutes the stock by ~10% to pay him for increasing the stock by ~1,200%? Seems like an insanely good deal for shareholders.

Yes, because those two things are correlated. Every board votes on CEO compensation.

Except it wasn't murder... The owners of the company voted to pay the leader of the company. There's nothing illegal about the owners of a company choosing to pay their employee.

This is not a good argument. Murder is illegal. Pay packages are set by owners of a company.

Unless there was evidence of a crime, there was no reason for the government to step in. Especially after the 2nd vote where the shareholders still ratified the compensation, it should have been over at that point.

Yes, voting on assassination and being held accountable for murder is absolutely correlated. Kinda like how if you convince your board and vote to pay yourself billions from your own company then you could be defrauding investors mayhaps…

There is no circumstance where someone can consent to being murdered. There are plenty of circumstances where someone can consent to giving their money to another person. You could also at least be mildly intellectually honest in your example and have it be an agreement that a shareholder is assassinated, rather than an unrelated third party who had no say in the vote. It is in fact an internal matter when all parties to the agreement had a say in the agreement. Not only is your analogy obtuse, but it's intentionally poorly analogous.

Most people don't understand positive sum concepts

He's probably going to meet the next pay package also. Hopefully he gets paid without nonsense.

That ship has long since sailed.

Don't stray into the other areas of Reddit where comments suggesting violence against judges is being up voted. I made that mistake just trying to get a vibe check, expecting mostly negative comments, but not to the point of threatening.

None of Elon's pay packages paid anything let alone defrauded anyone. The packages awarded Elon a tiny % of the value he was required to generate for the company. You earn me a trillion dollars and you get to keep a billion for yourself.

I'd say the rule of law wins. This doesn't really anything to do with democracy

Report those to the admins and move on. There is no point arguing with insanity.

Musk be restored 🤭

It was democracy in the sense that it was a pay package voted on by the stock holders of the company. So you are correct.

If you include stock holders voting on it then it would be.

There was also another vote before this last one to reapprove the original 2018 pay package after it was canceled by the court.  So they're wondering if they will get the 2018 one twice.

Well that’s fair. Let the people (shareholders decide)

One of the worst takes on anything ive ever read

Lol no

That's why Tesla reincorporated in Texas. It is harder to sue, no more bringing BS lawsuit with just 9 shares.

Anyone got a link to the court opinion?

of course they did... Elon has all the leverage because the actual company isnt worth anywhere near this much. Give me hundreds of billions of dollars - or I tank your stock. It will tank anyway - but maybe you can be the one to time the sell off.

Uhhhh you can still sue with just 9 shares in Texas. Every shareholder has a right. What they did was leave a state with good corporate law to kind of a Wild West. We will see how that plays out

Makes sense. I still can't understand the previous judge's order. It made no sense. Shareholders voted for this, so never understood the problem.

DE wisened up and realized if they overruled a valid pay package approved by a board then no company would incorporate in DE ever again. The initial ruling has already hurt them considerably as companies began incorporating in Texas

Imagine writing this, then thinking it was inteligent.

Had to scroll too far to see the real answer that “cough, cough (420)” has pointed out here.

https://courts.delaware.gov/Opinions/Download.aspx?id=389200

The next one has goals that are almost entirely impossible. Like shipping 20M cars, 1M robots, 1M Robotaxis and raising market cap to $8.5T. If all of that is accomplished, I'd say he deserves it.

It was a massive justice overreach that was rooted in "I hate Musk" not the law. There was no legal standing to overrule a company compensation package that was voted and approved by the board and shareholders.

Touch grass

I mean, it’s what the shareholders voted for (twice).

The shareholders didn’t have all the relevant information. Primarily that company insiders were projecting that the company would reach these goals within the projected timeframe. In other words, these weren’t stretch goals. They were minor speed bumps along the way. The only reason the board offered such a lucrative pay package was because they are sycophantic yes men.

\> good corporate law Yeah, ok

Ha ha. No it hasn’t. Delaware has more corporations than citizens.

\> man who hasn’t read anything about X for years comments about X on Reddit A story as old as time.

What companies have moved from DE to TX since this ruling?

lol there is a reason almost every company is incorporated in Delaware. They have a strong history of corporate law with tons of precedent as well. You know what you can and cannot do when incorporated there. Keep being ignorant if that’s your thing.

Willing to bet?

Historically*

Tesla’s attorney fees. All shareholders paid for this. Not just Elon.

I did.

Whey there’s a new term DExit to describe the consequence of your action, you know you’ve fucked up. This Delaware Supreme Court ruling was too late. From AI: "DExit" (Delaware Exit) refers to the recent trend of major companies leaving Delaware for states like Texas, Nevada, or Florida, sparked by Delaware Chancery Court rulings perceived as less protective of directors, especially after the invalidation of Elon Musk's pay package.

> with just 9 shares in Texas Supposing 9 shares is 3%.

But how could a judge do that, that just bewilders me.

I voted against it because he increased the stock price primarily via lying.

There was a clause on that, where it said if the court reverses the decision, the dupe package is canceled.

> Can you explain why you would vote against reapproving a plan that was already approved by shareholders and that he successfully achieved as originally agreed upon? Isn’t this obvious? The results have already been delivered, so you don’t get anything extra by reapproving the bonus. If you vote against it, you can get the best of both worlds - the extra stock value from increasing the price so much, and you don’t have to pay Musk the bonus. I can see the moral argument for paying him what he was promised, but from a purely fiscal reasoning, it seems silly to pay billions more if you don’t have to.

Companies have to change their articles, and it cannot exceed 3%. What is Tesla currently at? It also has yet to be challenged in any federal court, so we will see.

regardless of what the internal goals were the milestones were still viewed as being impossible

Yeah… they looked impossible to us because we don’t have all the information. They seemed quite likely to the board and Elon.

not just TX other states have benefited as well. Not looking anything up, I think ~~Utah or Wyoming~~ (edit: saw another comment mention Nevada and Florida) saw a rise in businesses incorporating. I know Oracle has relocated, and some smaller not very news worthy companies have left DE

Correlation. Not causation. Was the increase in registrations in WY and UT equivalent to a decrease in registrations in DE?

technically correct, the best kind of correct

what are you on about? the stock price hit an all time high in the past week

Here’s a recent Harvard Law article that empirically shows the DE corporation flight is real with the Musk decision being a driving factor. It also mentions multiple examples of companies that specifically moved from DE to TX. https://corpgov.law.harvard.edu/2025/09/23/dexit-reincorporation-data-seem-to-support-the-hype/

Nice! Thank you for providing a source

Damage is already done.

It should continue to hurt them. The judiciary compromised itself and cannot be trusted. There is no save and this attempt just makes them look worse.

I guess question in that equation should be what would be considered enough of a compensation. If we swap 10% dilution to 50% dilution then with your argument answer is still to vote yes because shareholders still would come out ahead even if less so. Obviously you should negociate compensation that maximizes profit and not just something that gives you some profit. If someone thinks say 5% dillution would have been enough then they would have voted against.

Than why is there a Wiki dedicated to the [Delaware corporate exodus?](https://en.wikipedia.org/wiki/Delaware_corporate_exodus)

If that was approved then would have the second one have been approved. Elon is getting paid was to much for what numbers Tesla are coming up with. I do love my Tesla, but I will never buy one again with Elon at the top. Also say that customer service if dog crap, and have not dealt with any worse customer service.

When is bribing Judges considered Democracy.

as dumb as I think the pay package was, letting a court just unilaterally decide that something like this isn't allowed is just silly.

It’s like promising your best employee extra cash then taking it away. You shouldn’t be shocked if they leave. Would Elon leave? Probably not but he was probably the reason the stock went up 1200%. And if he did leave it would look very short sighted.

At the time no analyst could figure out how it could happen. What information could they possibly know to make that climb a reality.

Why is it funny? He has literally been working for free for many years. It was bizarre that the judge dared touch his compensation.

That’s the same words people used with the first package. “Increase market cap of a small EV startup by 1100%, to be greater than every other automaker? entirely impossible”

It’s funny because he’s like Domino from Marvel…his superpower is luck.

Care to elaborate?

You understand there's no such thing as consistent luck? You "get lucky" winning the lottery once. If you win the lottery 30 times then you are a genius that found a way to succeed in the game of the lottery.

Garbage take. The ruling was legally sound, you just didn’t like it. You don’t get to break the rules and say “but most shareholders are okay with it”. They fucked up, it wasn’t valid. The shareholders that brought suit were right, the pay package wasn’t valid. That what real, normal, corporations should want. Consistent, legal enforcement of the law and their bylaws.

Coinbase, Dropbox

I will always buy a Tesla again with Musk at the top. His next goals for the trillion pay package are absolutely hugely difficult so he deserves every penny of that if he achieves them.

That’s not what the suit was though. The whole was that the first vote wasn’t valid because the board was bound by fiduciary duty and supposed to be independent (and it did and is still musks lackeys). The disclosures around that (at the time) were “material misleading”. The shareholders were lied to, and that invalidated the vote and by extension package.

The court still requires Tesla to pay 55m to the law firm, for this meaningless case. It still proved that it's no longer business friendly

Is that why the Supreme Court shot down the lower court's ruling?

As far as I know, the "rule " that was broken was that the board wasnt sufficiently separate from elon musk to properly negotiate, and the shareholders werent informed. This is pretty flimsy, because it is completely normal for the board to be long-standing associates of the CEO, so under this standard the majority of companies in Delaware would face liability.  The details were all public, including the fact that Elon's brother was on the board, but, the judge felt that people voting did not generally know about these things and therefore the vote was voided. Then the shareholders voted again, with knowledge of the specific things the judge was concerned about, and still voted to approve.  But note that the above are both very fuzzy. There's no specific action taken that was wrong per se, it's that standard things in the corporate world can be used as a pretext if a judge feels *in retrospect* that a deal wasn't fair. How far removed does the board need to be? Undefined. How much disclosure needs to happen about who knows who and for how long? Undefined. These are the kinds of legal uncertainties that people go to Delaware explicitly to avoid.  Is this what youre talking about? Or is there actual, explicit rule breakage that I'm not aware of?

Yes, you could argue that. However, there is nothing that guarantees he would stay even if you paid him the previous bonus. His attention is notoriously fickle, and paying him his previous bonus does not give him incentive to stay, since it has already been earned. He could leave tomorrow and still keep that bonus. However, my comment was giving a reasonable answer as to why someone would vote against reapproving the plan. I am not saying it is perfect reasoning, or that it is the fair decision, or anything about my personal feelings for it. The person asked a question that implied that it doesn’t make sense for someone to not vote to reapprove the plan; my answer was simply explaining the reasoning someone voting against the reapproval might have. Not sure why people downvoted me for the comment, since I was just answering the question. You can disagree with whether it is the smartest choice as a stockholder, but it seems like you have to at least accept that there is a logic to choosing not to reapprove the bonus.

“Musk be restored” Freudian slip?

Hmmm, I read it was $1.

When are they going to start censoring these screwball judges who dont even read the law and create bizarre legal theories that bear no resemblance to the law.

Free market capitalism can create wealth that benefits everyone and has brought billions of people out of poverty. Positive sum means that people like Musk can make $500b while also creating wealth that benefits society as a whole

Don’t try to rationalize Reddit downvotes. It will drive you mad.

$1 from Elon musk. $55m from Tesla

Ahh ok, I see, thanks.

Ah gotcha. Zero sum is a fallacy yeah.

[Three of the operational milestones already matched Tesla’s internal projections and the board “deemed some of the milestones 70% likely to be achieved soon after the [g]rant was approved.”7 The Court found unpersuasive arguments that the package was an “incentive” for Musk to focus on Tesla, noting that Musk stated “unequivocally” at trial that he “would have remained at Tesla even if stockholders had rejected a new compensation plan” and had “no immediate plans to resign.”](https://www.aoshearman.com/en/insights/delaware-court-of-chancery-finds-that-stockholder-ratification-following-adverse-judgment)

For most judges, there are virtually zero guardrails once they’re on the bench. They can be voted out or impeached if they screw up bad enough, but most voters have no idea what judges in their districts are up to

Top 1% and still doesn’t get it

That’s true if billionaires paid fair share of taxes like an average middle class person does. But they pay an effective tax rate so low meanwhile someone making $400k/yr pays like 40% just because it’s all W-2 income and it’s easy to tax and there are no loopholes to exploit. They do the same thing with estate tax by setting up trusts and pass on all of their wealth to the next generation completely evading the estate tax.

That propaganda just ain’t true. According the IRS web site, the top 1% of wage earners pay 48% of all income taxes paid. What percentage do you think would be “fair”?

You do realize top 1% just includes your average wealthy doctor, lawyer and accountant right? They typically have a net worth of $5-10m at most by the time they retire and pay huge effective tax rate because of their W-2 income. That’s exactly the problem I’m trying to point out. The billionaire class are more like top 0.0001% of the US population. There’s a massive difference in wealth between 1% and the 0.0001%. The 1% fly in economy class with the rest of us. The 0.0001% own several private jets, super yachts and private islands.

Delaware lost so much business for this to ultimately get overturned.

Yes, and the top 1% ALSO includes your top 0.0001%. I note that you sidestepped the question. Instead you ranted about what they have that you don’t, which sounds a lot like envy to me.

The point was that the board didn't act in the shareholders interest in just rubber stamping what elon wanted to present it. Would he have taken a dollar less? What about ten? No one pushed back.

You asked what was fair. I told you what I thought was fair. But you don’t like it. Maybe you don’t believe billionaires should pay the same effective tax rate as the rest of us. There’s even a very popular public admission from Warren Buffet in which he said he thought it was wrong that he had an effective tax rate lower than his secretary. It even resulted in a new piece of legislation to impose a minimum tax rate on billionaires but as you’d expect it stalled in Congress. So no I’m not jealous. I want someone who is incredibly innovative to go from poor to billionaire class, but I simply want them to pay the same effective tax rate as any other person in the country would.

Do you think trillionaires should exist?

You nerds want him to make a zillion trillion gazillion just for selling cars what the F is wrong with you people?

Billionaires aren't wage earners.

So even though the effective tax rates for the top 1% are lower, they still end up paying that much tax. That just tells us how much more money they have than the rest of us. It's not really the message you seem to want to convey.

Love defending corruption.

You have a solution to billionaires assets being stuff they haven't cashed in yet? You want them to pay taxes on money that is effectively 'stored' in a company, on the off-chance they sell it with profit, even if they don't yet?

Now they say anyone could do it. Must be why thousands of companies did it, right?

I can't imagine anything more corrupt than a judge being able to retroactively invalidate a contract between two willing parties, years after the contract was agreed upon, after the terms of the contract have already been executed, where the parties involved are happy with the outcome, for the sole reason that the judge unilaterally believes that the contract was unfair, and that judge then gets to take some of the money from the contract and give it to a completely different third party.

Yeah. Musk obviously stumbled into Tesla, SpaceX and every other successful thing that he is involved in. /s

Same with a self landing reusable rocket company.

TL;DR - The Supreme Court decision was UNANIMOUS, and both left and right sides of the court scorched the McCormick decision and all the flaws with it. I wonder how much long-term damage the lower judge did to Delaware given that while DE used to be considered the de-facto safe space for corporations to go, the original ruling worried a lot of corporations that DE was going to become a state ruled more by judicial activism than sound law, and in that case, the corporations will always lose. How many companies have left the state beyond just Tesla, one of the top 10 highest valued companies on the planet? How many have chosen alternatives to incorporate in because of this ruling? Like Elon Musk or not, the shareholders are the ones who should have the power, not the judge because they felt the pay package was too generous. When the shareholders voted again, 6 years after the original vote, to vote again as a demonstration that even now, they still believed his pay package should be approved, the judge basically said she didn't care and their vote was irrelevant to the decision. So, DE supreme court comes out and basically excoriates the lower court judge, unanimously... but who knows the true damage to DE long-term that problem can never actually be measured, which at the end of the day, all it did was given Elon Musk a big headache for a year and a half.

Elon has leverage, because "the actual company isn't worth anywhere near this much". Sound reasoning there... /s

I don’t claim to be a leading economist. Are you seriously telling me there’s no way to make billionaires pay an effective tax rate of 40% on their wealth and also figure out a way to prevent them from avoiding estate tax? The world’s best economists and tax policy experts don’t have any ideas on how to do this? Humankind is trying to figure out AGI, nuclear fusion but figuring out an equitable way for billionaires to pay a fair share of tax is the one thing we don’t have any ideas worth trying? Really?!

How was it not valid when it was approved by the board and majority of shareholders?

Yeah, it’s stupid, I voted against as well. But the fact is, the board approved and promoted the pay package. And the majority of shareholders voted to approve it. The court striking it down never made sense.

> As far as I know, the "rule " that was broken was that the board wasnt sufficiently separate from elon musk to properly negotiate, and the shareholders werent informed. This isn't quite accurate. The issue was not just that the board was too close to Musk; the other (arguably more impactful) half was that the board *acted* too close to Musk. For instance, consider what the Court of Chancery said about the SolarCity acquisition: > Although the Vice Chancellor found that there were significant flaws in the process that led to the SolarCity acquisition, the court held that “any control [Musk] may have attempted to wield in connection with the Acquisition was effectively neutralized by a board focused on the bona fides of the Acquisition, with an indisputably independent director leading the way.” In reaching this conclusion, the Vice Chancellor emphasized that the board rebuffed multiple of Musk’s demands during the process, that Denholm “emerged as an independent, powerful and positive force during the deal process who doggedly viewed the Acquisition solely through the lens of Tesla and its stockholders,” and was an “effective buffer between” Musk and the conflicted board. This is in contrast to how the process played out for the 2018 compensation package, which as Musk put it, was basically him negotiating against himself. > Then the shareholders voted again, with knowledge of the specific things the judge was concerned about, and still voted to approve. This is an entirely different legal issue. A major factor in Tesla's loss at the Court of Chancery is that the compensation plan was subject to "entire fairness" review (i.e., Tesla must prove that the transaction is fair) instead of "business judgement" review (more or less "the business knows best"). Since Musk was considered a controller for the purposes of the transaction, Tesla needed to meet both prongs of what is known as the *MFW* framework if it wanted business judgement review: - The terms of the transaction must be the result of negotiation by an independent party, *and* - The transaction must be approved by a fully-informed vote of a majority of minority stockholders Note that *both* conditions must be met. Even if you assume the second vote was fully-informed, the transaction that was put to vote still did not meet the first prong of *MFW* and so it changes nothing with respect to the standard of review.

Yeah ... the shareholder that owned only 9 shares that he made money on was right. Good Lord.

These companies is Ponzi scheme... the money is theoretical and the only people who make money are the people at the top of the pyramid or those lucky enough to time the rug out. Bernie Madoff made tens of billions of dollars for this clients - its not the company thats worth a trillion dollars - its Elon Musk. Why would a person be worth so much? Is he a super genius? Is he personally inventing self driving cars? No, hes a salesman who is selling futurism - and hes very very good at it. And everyone knows the evaluation is based on his personality - which he is able to use as leverage against stock holders.

Again, based on what? It’s literally just Elon Musk, tweeting about self driving. Something that he’s been claiming for 10 years. The problem isn’t the stock price. The problem is the lack of profit. If Tesla had the highest profit ever that would be amazing. Unfortunately it’s been lowest profit ever but highest stock evaluation. Something is wrong.

I’m satisfied if the even pays his own lawyer fees. Asshole probably owned one stock to sue.

Dozen companies out of thousands is not exactly much of an exodus in bigger picture.

Even if he would pay 0 taxes, it's not like Elon is buying expensive yachts and big mansions. He wants this money to expand his conpanies and his vision. This creates more opportunities and jobs for workers and is good for the country / economy.

The problem is you people only look at taxes as the money that benefits society, when in reality most of what makes life good has nothing to do with taxes or government spending at all. Billionaires generally make their billions by creating extraordinarily successful businesses. These businesses have products people use frequently, or they solve previously unsolved problems, or they do things better or cheaper than in the past. The fact that food is so much cheaper than it was a century ago is due to free market technological innovations. The reason you can order anything imaginable online and have it show up on your doorstep the next day from Amazon is due to incredible technological and logistical innovation. The smartphone you’re constantly on was created by brilliant scientists and engineers at companies created by, run by, and invested into by billionaires. It’s crazy that so many people think billionaires just have their money sitting in a bank vault collecting dust. I can’t imagine having a model of the world that out of alignment with reality.

Not really since in democracy everyone has equal vote, not based on wealth. This is just capitalism.

I’m calling all of his companies Ponzi schemes. His companies do not make anywhere near the profit required of companies that match these market evaluations.

If they provide enough value to the world that earnt them those trillions, obviously.

The marketplace of judiciaries

Fair-ish. Though let’s not confuse types of governments with types of economies. It is also only people with a stake in the company and no one outside of those people are affected. Elons wealth only comes from investors risking their money. Not the public. He doesn’t even get money from people who own Tesla products. Just investors.

Oh so when it comes to billionaires, the rules don’t apply huh? Taxation is optional because they invest in enterprises? So why doesn’t it apply to the rest of us? Most of my money is invested in the stock market. So should I also be exempt from taxation then? I will invest even more of the money into American companies then.

So what? If I invest in startups and companies, do I get to exempt myself from paying taxes?

You're missing the point.

The fact that they are "worth" a trillion proves that they have provided enough value, or the companies they own (and thereby its stock) wouldn't have had its price driven up.

No.

I don't care if trillionaires exist. Such value is entirely theoretical anyways; they don't have any of that in actual money or cash. It is computed by taking the share value and multiplying it by the number of shares they own. This is theoretical because if they were to try the sell that many shares, the price would collapse and it would only bring in a fraction of what the theoretical value says. The fact that a stock price has been pushed so high proves that those with crazy high "wealth" values have produced huge value for society that enough people have shown themselves willing to buy shares at a high prices.

Doesn't matter. If they take their money out as capital gains, it is still taxed. Any way they get their money, it is taxed. The IRS laws ensure that. If they don't take it out, and leave it to their families, it gets taxed when inherited. The IRS *always* gets its share.

Your comment suggests envy—hating that someone has more than you. If that bothers you, you need to look inside. Here is the reality. Wealth is not a zero-sum resource, such that if one has it, someone else does not. Wealth is a positive sum resource, such that when one person makes more of it for themselves, the make a lot for everyone else. Money is only a measure of wealth; it is not wealth. For anyone to create a large amount of wealth, they MUST have created huge value to society, such that there is more to go around for everyone. The only way to be wealthy is to have convinced others to give you money for something they want. In the case of Musk, he is worth a lot because he has created all kinds of products that others feel they simple *must* have, and that others feel the company is so desirable that they are willing to pay a large price for the stock of the companies Musk owns a portion of (including millions of people who chose to buy shares in).

Then that'd be true of every single compensation package. Any CEO would have agreed to a few fewer dollars.

Tesla's marketshare is going down and has no new mass-market cars in the pipeline. It's also going down in absolute numbers with no end in sight. Tesla itself seems focused on robots and AI / FSD than cars. Based on that, I don't see any way how it'd meet the targets.

SpaceX, Tesla, DropBox, TripAdvisor, have already moved. Meta is considering a move to Texas. We aren’t talking about small companies. These are some of the largest businesses in the world and they are leaving Delaware at the same time. Is that a coincidence?

This is again drop in a bucket among thousands. It is not like every big tech is leaving or something.

There is very little a judge can't do. Its up to the higher courts to overturn, but that can take a lot of time.

Billionaires do pay taxes, far more than you do

No they don’t. Not as a percentage of how much money they make. They can effectively not pay any taxes because all of their money is in equities that have massive gains. The gains don’t become taxable until they sell. So the loophole is they just don’t sell and keep borrowing against it to fund their lifestyle. Finally when they die, they pass their entire wealth to their heirs via a trust (avoid estate taxes) and also get step-up cost basis treatment (so all the gains vanish) and the entire cycle starts all over again. They can do this indefinitely for generations.

Bruh lol. Do you think future/current companies will honestly look to Delaware to incorporate given the state of things? It has lost the business friendly environment. No, not everyone will leave, but the damage is done.

Well according to statistics 75% of IPOs this year still happened in Delaware. It is drop from 80% that was last year but dominance has not exactly gone away and seems like companies still were happy to incorporate after initial ruling of Elons case.

so?

Might be worth noting that the Delaware Supreme Court decision only "excoriated" the Court of Chancery's remedy and the reasoning behind it. Half a sentence, if that, was devoted to the reasoning that *led* to the remedy, and as a result, that part of the lower court's decision still stands. Of course, that probably doesn't matter all that much at this point.

> Shareholders voted for this, so never understood the problem. The thing is that under Delaware law a shareholder vote of approval in and of itself has never been sufficient to approve a transaction. To be honest, I'm not sure if there is *any* jurisdiction where a shareholder vote alone is dispositive; there's going to be at least *some* rules/process that needs to be followed for the vote to be valid.

*If you win the lottery 30 times then you are cheating.* FTFY, drive through, no charge

why is the focus always on who and what is getting taxed and NOT where those taxes go and what they are used for?

That’s a valid debate to have too and we should have it because politicians like more tax revenue and running deficits inherently and their investments may not have good ROI for the nation. But that’s an orthogonal issue. Irrespective of what is the right amount of taxation (how lean a government should we be having), you still need to make sure the tax burden is evenly distributed across the population (billionaires can’t be exempt from the tax burden through loop holes).

BS. The Delaware Supreme Court ruled unanimously against the lower court judge, so you are incorrect.

The court determined it was essentially fraud. If you were a shareholder you were essentially stolen from through dilution

No they basically agreed with her ruling but said that the judgement was too harsh. So yay! Board of directors break their fiduciary duty and lie (omit) material information from investors and they get a slap on the wrist. As an “investor” I can’t imagine why you’d be celebrating that.

🤣🤣🤣

If all your net worth increase is unrealized gains from your investment, then yes.

Yes I understand the tax code works. But not everyone is going to be founder of an early stage startup that becomes successful. I mean someone has to be willing to work as an employee at these startups for them to succeed.

And when they reapproved it after the fact with over 70% of votes?

The vast majority of retail investors are Elon sycophants. Why did the institutional investors vote on it? I haven’t heard and don’t understand.

I hate to tell you this buy most Investors vote with their money and in away they think it will make more. You might love or hate a CEO but you don't invest because of that. I really like RJ at Rivian but will not invest because I don't think they will ever make a profit. Elon got the majority of even the Institutional investors because they think it will serve their investors. I might be wrong about Tesla or Rivian but it's not because I like or hate the CEO.

We’re not talking about the share price or the success of the company. We’re talking about why investors voted to reinstate his bonus. That’s what I was referring to

Yes as an Investor I thought the right thing to do was pay him for the task he had completed. Everyone profited. I also Voted for the so called 1 Trillion package. If and I have my doubts but If he can hit the goals he needs to for the payout then The company will have a 8 to 10 x the stock price. If he comes up short then he will not get the whole payout. The main point is I know he will be working his hardest for Tesla. His current wealth and future wealth are tied to it. Going to mars is not going to be cheap. I just hope he doesn't have a heart attack or something. I can not think of any other company so tied to one person. From an investment prospective it is not good.

But if the stock price has to 8-10x then he’ll already be worth $5-$8T. (I don’t know what the stock was at when the pay package was agreed to.) The extra $1T isn’t going to be all the motivating. His wealth is already so unimaginably high that he won’t notice the difference between his life now and his life if he had 1,000x more than he already does. Additionally, this pay package will not and has not pulled his focus away from SpaceX. Not to mention, xAI (which is actually competing with Tesla.)

No the package is only worth 1T if the stock is 8 to 10X. For Elon it's not about what the stock is worth. He wants the Voting shares. His goal is 25%. He is at about 13% now. He wants to make it hard but not imposable to vote him out of the company. Anyway nice chat.

Most critical thinking beings don’t think Musk benefits society as a *whole*

When are you people going to learn?

Oh trickle down economics. The rich pissing on the middle class and calling it rain.

Yes. Tax them like property tax. I have to pay taxes every year on my home's unrealized gains and so should they. If my home's goes value goes up one year and then down the next I don't get any tax break.

> Your comment suggests envy—hating that someone has more than you. Instead of engaging in conversation first, you attempt to shut the previous commenter down in your first sentence. You’re trying to reframe the subject of the argument as a psychological thing. That’s not what’s at play here. They never stated wealth is a zero-sum, nor implied, or conveyed it. Guessing your comment is AI Edit: yeah, definitely an AI bot.

Learn what?

I’m pretty sure they shut the government down for two months over that issue.

Good

The new pay package did have an immediately awarded level intended to "cover" this one, but it did have a condition where, if the previous package was reinstated, this "immediate" award level would be voided. i.e. no double dipping. [Edit: saw in another comment these were two separate votes. Still, end result the same - no double dipping]

Which hasn’t stopped all the posts about musk’s net worth now exceeding $700B…

You see those downvotes mostly tell me that people are genuinelly good. They believe in honest trades, keeping promises, and so on. And that's exactly how people like Musk get them :D

Musk be restored… nice.

Says the person living a lifestyle that nearly anyone would be in awe and envious of 100 years ago. You're so rich and you don't even know it.

No, it's not predicated on that at all. Free markets create immense wealth for everyone, even if the wealthiest people aren't taxed highly. (To be clear, I'm in favor of reducing wealth inequality.)

The stock price does not need to reflect the performance of the company. It should, but it does not *need* to. If there is a discrepancy, it does not automatically make it a ponzi scheme. Thankfully you don't need to invest in Tesla, so you are good.

so tesla is now missing 140bn on its balance sheet?

We have a major issue with judges not actually caring at all about the law and just doing whatever they see fit. Judicial activism has gotten completely out of hand.

I mean anyone can invest in a Ponzi scheme. They don’t always collapse right away. Tesla is running 330 Price to earnings. This is insanity. They sell a decent amount of cars but not THAT many. Cars like the cybertruck are literally massive failures that would bankrupt a normal car company. And things like the Tesla semi are extremely niche due to capacity and likely not profitable. But self driving cars you say! Well Elon admits that no one wants to license the tech - he tried. Something that would be a huge priority if he wanted to become an AI self driving car company. And other competitive self driving tech exists - he’s not a monopoly - although Tesla is a monopoly on self driving consumer cars. But robotaxis - what robotaxis? They have human drivers in them except in one section of one city. And again Waymo exists and as a massive head start and all their cars are full self driving. But Tesla robots. What market is there? There is literally zero market for humanoid robots. There is a competing company with an AI human robot run with an actual human with a VR device that everyone makes fun of. But Tesla robots are literally the same thing. Did everyone forget that he promised to make 50k Tesla robots this year and it’s already December. Of course he took back that claim a few months later - but that didn’t lower the stock price. The robots are cool - but functionally they demo that provide zero practical value. All human form factor robots will provide zero practical value until AGI becomes viable. So maybe Tesla is an AGI play? But is it? Did we forget that xAI is a different company. I guess solar exists and is a bit profitable. Whats the play here? Self driving? There is a competition from another company that has more backing and the only company with full self driving at scale. AGI robots? Gotta have AGI first. And once AGI exists will anyone have a spare 50k to even hire these robots to do their chores when they can hire desperate laid off workers to do them. There is just no viable market for Tesla to have 330 price per earnings. Even if it’s an AI play - why isn’t Google at 300 price per earnings instead of 30. Even nvidia is at 45 and people think that’s a bubble.

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First order was before shareholders vote, it was board of director's decision, concern was about that Elon could influence board to approve it. After shareholders vote there is no reason to block it anymore.

Wow, what happened to everyone pay their own lawyers?

Ah yes. He should see the light of class warfare that has brought prosperity to \[checks notes\] no country on Earth.

It's more like promising an employee no pay UNLESS they deliver nearly impossible goals. Then waiting until they deliver and only then deciding that it was too much. The time for the courts to strike this down was long ago, not after mission accomplished.

yeah, because it has robust investor protections. . .no more.

also how could one guy with 9 shares, probably guided by lawyers looking for a huge payday, tie up so much time in the courts

the judge's opening remarks started with "does the world's richest man need more money?" clearly NOT motivated by the actual case, or the law, just a bone to pick because Billionaire = bad

they still got paid 

i agree with your point on politicians and that tax loop holes shouldn't exist. Also Musk is the largest individual tax payer in history

He is already the richest person in the world and is also set to become the world’s first trillionaire because of his new pay package (good for him). So the amount of taxes he owes should be proportionally higher than pretty much anyone else in the world. That’s a given. But people in this thread seem to keep confusing absolute numbers vs relative percentages. If a surgeons who makes $850k/yr owes 40% in taxes because he/she is making “too much”, then why shouldn’t the world’s richest man also face an effective tax rate anywhere close to that surgeon?

Because just like zero sum is a logical fallacy so is whataboutism.

Your reasoning sounds solid, but reality doesn't agree with you. The people and institutions buying Tesla stock believe that the price is justified. They are either right or wrong. The fact is the stock price is what it is. You should not try to make sense of it. You should either short it or buy Tesla stock. If you are not going to do either, then stop wasting your time raging about where the stock price is.

First - I did short Tesla multiple times. It’s a fools errand. Second, my point isnt stock advice. It’s that the richest man in the world isn’t the richest man in the world by running his companies as casinos. “Don’t think about it” is literally the problem. Elon companies are exploiting FOMO. He’s created a brand where anything he touches goes up in price so people buy it to gamble that they won’t be the one holding the bag. He sells futurism. It’s dangerous for an economy to run this way - and he’s literally done so well selling his products as something they aren’t that he has put America at economic risk whether you own his stock or not. And most people do on their 401ks or generic top x stocks.

You. Are. Wasting. Your. Time. Commenting. About. This. Also, you are wrong. For some reason what you see is Elon Musk starting companies and then dumping his share in it. In reality he doesn't sell his share in his companies. In your mind he is somehow benefiting from not selling and investors are not benefiting even though the value of their investments increases. I don't think this conversation is productive for either of us. Cheers!

Then the shareholders voted again after the fact and still passed it, yet DE once again rejected. Insane.

That’s not how any of that works. That second vote was *meaningless* and Tesla knew it. It was non-binding, only for PR reasons (literally you repeating it). The problem was never the amount. The problem was everything the judge outlined (conflicts of interest, breach of fiduciary duty, failure to disclose), and those can’t be unwound.

Even if was just for optics, it served it's purpose in making it crystal clear that DE was acting against the will of the shareholders.

That’s not how the law works. It’s not corporate vibes, it’s corporate law. A shareholder brought suit. It was found, rightfully so that they broke numerous laws in the process of what they did.

They caved to craven corporatist interests and it’s embarrassing. What I don’t get about this is that DE just enforced what *shareholders should want*. The board was clearly working for Musk, not the shareholders, and purposefully obfuscated that. Which invalidated the original vote/approval. It’s not complicated. The fact that it worked out is great for shareholders, but Ponzi schemes work out for investors…for a while too.

Perhaps a more accurate phrasing is that it made clear that companies should hesitate in trusting the judgement of the DE courts.