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Elon Musk suffered a major loss in a Delaware Court this week when a judge voided his $55 billion compensation
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package from Tesla uh judge Kathleen McCormack uh called the compensation quote an unfathomable sum and it was
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unfair to shareholders and the process leading to its 2018 approval was deeply flawed when you read through the
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documents it really it was such a backs scratchy situation among the board members who are all friends of his um
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apparently one of them cried how how much he loved on it which was kind of disturbing uh
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Elon responded to the ruling on X posting never incorporate your company in the state of Delaware too late Elon
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and also you should have had a stock that put you in control control of the Dual class shareholders which you didn't
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do either um so too bad that if you had a time machine um were you surprised by the ruling first of all the judge let me
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gives you more facts the judge ordered Tesla to cancel the stock options order to Elon valued at about 51 billion which
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is where most of his compensation is Tesla's directors now have to figure out a new Compensation Plan that passes
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legal muster and keeps Elon happy and does it at an arms length which is good luck with that because this board has
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shown itself to be a giant rubber stamp for Elon Musk um we haven't heard if he's going to appeal but after a poll on
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X he's now saying Tesla will hold a shareholder vote to incorporate in Texas um anyway what does the ruling mean for
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elon's Quest to get that 25% I've never I've never heard of this happening or seen it happen the fact that I've been
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on compensation committies are boards I've never had a shareholder lawsuit against
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compensation the schematic you put in place but to have a shareholder lawsuit I've heard of them like Martin cell had
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shareholder lawsuits constantly around his compensation but to have it rejected I mean effectively the shareholders
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decide who the board is and so if the shareholders decide who the board is who decides the compensation then
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technically the owners of the company have decided you know what what he or she gets I'm not a i don't believe you
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should limmit compensation I think we live in a capitalist society and I don't like the idea I I do believe that we
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should have a more progressive tax structure but anyways that's another talk show but this effectively says that
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this board is so incompetent and so conflicted that any decisions they make might not hold up in court because of
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the conflicts there even if you read the ruling they talk about the size of it but what they talk about is the
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conflicts and just how uh poor the rationalization was for giving him this cuz is much as the compensation was I
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mean just to just to be fair and try and call balls and Strikes him getting in an
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incremental 50 billion if you increases the value of the company 500 billion that's that's not I've seen
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compensation plans that on you know I mean it's exceptional but on a proportionate size or percentage of
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value increase it wasn't outrageous what this says is you know what's going to end up happening here he's not going to
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be able to reincorporate all this all these threats all these jazz hands all this fake can you do that when I was
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reading that I was like I'm not sure you can I don't um the I should have just said right off the bat um I don't I
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don't I don't know but the the notion that and then he's just he's just so ridiculous he says he he said I want to
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meet with shareholders and convince them to divest from Tesla or any companies ever they are not welcome well Elon I
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don't know if you've heard or you understand corporate structure MH but Co the luxury of shareholders not vice
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versa you don't get to decide who your shareholders are the shareholders get to decide what CEO they want mhm and if did
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you see the movie did you see Pulp Fiction long time ago yeah well there's a scene in it where I think his name is
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great actor Vin rang yeah yeah he was in Miss imposses yeah I think he is knocked
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onc conscious um they put a gag ball on him and they rape him he had much more domain and dignity than this board has
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right now this is this board has been just molested they should show up to the next annual meeting with a gag ball
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because that's they are I the fact that a court has said you are so incompetent and so conflicted and
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you are such terrible fiduciaries for shareholders that we're going to just reject his compensation somewhat because
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of the size of it but just because this Bo wasn't the size I I have to tell you you know cuz you could make an argument
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that he deserves it see it wasn't how the number they got to um you certainly can make a cojen argument he deserves
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it's a lot of money but still um uh but the the details like the going on vacation one of them I think Antonio
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Garcia's their best friends the brothers on there uh what one of them was a CFO and he cried because he loved Elon so
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much I mean you cannot do there's no Independence among any of these people you know on this board and so just was a
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hands you know you're supposed to have I mean boards are cozy let's be honest come on like you know that like they're
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very cozy with the CEOs intend to give the CEOs what they want but at least they have they pretend that they're not
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doing quite this and so it's so bad that's and which is this is something we've just talked about without any
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particular knowledge it's so obvious it's a rubber stamp of a board they don't stop him from doing damage via his
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tweets they didn't control his um Behavior they made worry about his drug use but they don't do anything about it
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or don't think they can do anything about it so this is just another this is the least the least surprising thing
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that their pay package was done you know by Elon essentially Elon wrote it and then they rubber stamped it right well
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the Delaware chanelly Court he gets to appeal to the Supreme Court of Delaware it'll get they will they will uphold uh
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I think Chancellor McCormack's recommendation but I mean this comes on the heels of him deciding that at
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threatening the board that if they didn't give him $75 billion didn't give him $75 billion in additional
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compensation he's still doing that yeah he was going to steal the IP from the company and start his only I I mean the
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the the board the Delaware Court has said your board your board isn't competent what what ultimately ends up
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happening here though I mean all the threats and the jazz hands around moving to moving to Texas he's going to have to
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replace the compensation committee and get someone to lead the compensation committee who has some credibility and
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also doesn't want to be lost there's a there's a story from writers about this that said legal experts said musk would
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almost certainly be sued by investors if he tried to move the state of incorporation to Texas particularly if
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he was seen as a move to secure his pay package rather than obtain some benefits
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for Tesla shh holders it's so it's so in plain sight uh Elon mus plan to change Tesla State incorporation of Delware
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Texas's typical behavior for an entrepreneur ho looks for an alternative he can't gets what he wants um
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shareholders need to take a hard look at how transitioning out of Delaware might
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impact their rights in the companies governments these shareholders aren't going away um you know and and this is
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the same judge who oversaw the lawsuit um Twitter with the Twitter he had to buy it this judge is showing him um he's
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looking for a nicer judge right uh in Texas um well maybe his brother could get on the chance to record a do I mean
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at the end of the day I love the term fiduciary yeah and fiduciary is very simple when you
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when you get to a point in your life where you're worried about all right once I'm sick once I die I need someone
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to represent my interest and see you appoint a fiduciary for your state and it's a wonderful term and one of our
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abilities as a as humans as a species is we can trust other people to serve our interests maybe when it doesn't serve
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their own because they agree to be fiduciaries and boards are supposed to be fiduciaries for all stakeholders and
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I think he owns about I don't know 12 or 15% of the company which means that they
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are supposed to represent the other 85% they're supposed to represent the community they're supposed to represent
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National Security and this board is I mean they're just horrible fiduciaries they have absolutely they represent or
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have tried to represent one stakeholder and one stakeholder only and Delaware has just said you when you're a public
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company and you sell shares to retail investors you have certain obligations and this board isn't living up to it
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he's all roads lead to the same place he is going to have to find threat and needle between by finding someone
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credible who also he thinks will do anything he wants and those two are in direct contradiction with each other
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well it's not clear that Texas judges will be roll over not necessarily like that it's a big risk but whatever he
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likes to do this I don't think that's going to happen he's not going to incorporate in Texas he's not all roads
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65% of companies are Incorporated in Delaware because of their law you know their friendly business friendly Lawes
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he's going to have to get he's going to have to appoint new people to the board who serve on and one of them is going to
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have to serve on the compensation committee and such that can you imagine i''d be like no thank you well I I I
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actually think he'll be able to I think there's a lot of people it's like no one
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ever said that anyone would be in Trump's cabinet I think the seduction to be near the seat of power is too huge
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for people also threat of lawsuits if you're if you're I wouldn't be a director of that company saved my life I
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mean yeah but here's the bad news Cara someone who served on a lot of boards you get D Insurance there's only do you
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realize the people the people who served on enron's board they had to give some of their
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compensation you basically have to murder people to get in trouble as a board member you just they're so
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protected that's why this ruling is amazing don't you think this is I have That's Why Us never seen this before I
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have never seen a a a a compensation package rejected and it's it's retroactive he's not going to lose money
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because he hasn't exercised the options but not only is he not getting the additional 75 billion he's been trying
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to Blackmail the board from I mean there's no way they can give him that money now I mean they look so stupid
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yeah he's going to have to he's going to have to appoint something resembling an
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independent director to the compensation committee otherwise the next comp package is going to be rejected this
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this Chancellor uh Chancellor McCormack I think that's how you refer to her she's just not impressed by Elon no
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she's like no I'm going to look at the law cuz she's a woman back on I'm going to look at the law and and I'm going to
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interpret the law and I need to send a signal to every board even the board of hot companies with a guy who tweets all
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day that they have an obligation to be fiduciaries this is this is a good ruling for corporate governance and for
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other corporations because cop has accelerated from 27 times an average worker Sol Sal to over
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350 in the last 40 years and some of it is the coziness you talk about some of it is just um people are more
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comfortable with people making billions of dollars whatever it might be but this
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is yeah this is I I love this ruling and I think she's fantastic yeah she is she's great she it has a sense of like
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I'm over you I'm not I've never was under you but I'm way over you kind of thing um anyway we'll see what goes on
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he's going to do his Antics his loud mou he's like how many rules can you just keep breaking and you're you know a you
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know what drives me crazy this idea that he's some bold uh speaker of Truth as my
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wife that's her expression he's not a bold speaker of truths he's just a toddler it's a badly behaved toddler
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he's turning into he's turning into a cautionary tail because he is there's just no getting around it he is a bold
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Visionary genius when it comes to products and risk-taking I I think on the whole he's been good for the world I
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wouldn't want to press a button where he just you know never immigrated to America going to be you know you got to
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give the guy his due but he's just totally he's a cautionary Tale