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