Elon Musk drama intensifies as Tesla shareholders vote on his $56B pay package: Here's what's at stake
What specific reasons did the Delaware court provide for striking down Elon Musk's original $56 billion pay package in 2018?
The Delaware court struck down Elon Musk's original $56 billion pay package in 2018 for several reasons. The judge found that Tesla's board didn't act "in the best interests" of Tesla shareholders by approving the $56 billion award. The process leading to the board's approval of Musk's compensation was "deeply flawed," with Musk having "extensive ties" with the persons tasked with negotiating on Tesla's behalf. These ties included personal relationships, such as family vacations with the Tesla CEO, and his former divorce attorney being among the management members who were beholden to Musk. The judge concluded that Musk launched a "self-driving process," recalibrating the speed and direction along the way as he saw fit. The entire process was deemed "deeply flawed," and the judge found that Musk, rather than the board of directors and shareholders, controlled Tesla when it came to the question of setting his compensation.
What are the allegations made by the Employees' Retirement System of Rhode Island (ERSRI) against Elon Musk and his brother Kimbal Musk in their recent lawsuit?
The Employees' Retirement System of Rhode Island (ERSRI) has filed a lawsuit against Elon Musk and his brother Kimbal Musk, accusing them of selling a combined $30 billion of Tesla stock using inside information2. The lawsuit alleges that the two brothers knew the proceeds would be used to fund Elon's purchase of Twitter (now X), and that they were also aware that Tesla's vehicle deliveries had fallen below projections4.
How has Tesla Chair Robyn Denholm advocated for Musk's compensation package, and why is this unusual for an independent board chair?
Tesla Chair Robyn Denholm has been advocating for Elon Musk's compensation package by urging shareholders to approve it. In a letter to shareholders, Denholm argued that the pay package is necessary to keep Musk focused on Tesla and motivated to achieve the company's ambitious goals. This is an unusual move for an independent board chair, as they typically do not get involved in advocating for management pay packages. Denholm's letter emphasized the importance of Musk's continued leadership and vision for Tesla's growth, and she called on shareholders to support the compensation package as a matter of "fairness, respect, and the future of Tesla."