{"id":133069,"date":"2024-12-04T03:34:46","date_gmt":"2024-12-03T20:34:46","guid":{"rendered":"https:\/\/hotvideos24.online\/?p=133069"},"modified":"2024-12-04T03:34:46","modified_gmt":"2024-12-03T20:34:46","slug":"musks-legal-battle-for-his-56bn-goes-on-teslas-board-still-looks-supine-nils-pratley","status":"publish","type":"post","link":"https:\/\/hotvideos24.online\/?p=133069","title":{"rendered":"Musk\u2019s legal battle for his $56bn goes on. Tesla\u2019s board still looks supine | Nils Pratley"},"content":{"rendered":"<p> <script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<\/p>\n<div>\n<p class=\"dcr-1n1orvu\"><span style=\"color:var(--drop-cap);font-weight:300;\" class=\"dcr-15rw6c2\">T<\/span>he first time around, judge Kathaleen McCormick of the Delaware court of chancery got it right. The $56bn pay package awarded by Tesla to Elon Musk in 2018 was indeed a governance abomination, a stitch-up in which ordinary shareholders weren\u2019t told about <a href=\"https:\/\/www.theguardian.com\/technology\/2024\/jan\/30\/elon-musk-tesla-pay-package-too-much-judge-rules\" data-link-name=\"in body link\">the \u201cdeeply flawed\u201d process<\/a> whereby a \u201csuperstar ceo\u201d secured wildly over-the-top terms from pliant directors.<\/p>\n<p class=\"dcr-1n1orvu\">Her closely argued ruling in January spelt it out in persuasive detail. The company had \u201cinaccurately described key directors as independent and misleadingly omitted details about the process\u201d. Ira Ehrenpreis, the lead director negotiating for <a href=\"https:\/\/www.theguardian.com\/technology\/tesla\" data-link-name=\"in body link\" data-component=\"auto-linked-tag\">Tesla<\/a>, had a 15-year business relationship with Musk. Another member of the working group regularly went on holiday with Musk\u2019s family. A third was the company\u2019s general counsel and Musk\u2019s former divorce lawyer.<\/p>\n<p class=\"dcr-1n1orvu\">Tesla\u2019s share price still had to perform spectacularly well \u2013 the company\u2019s value had to rise from $50bn-ish to $650bn for Musk to get the full whack \u2013 but the size of the prize was plainly beyond what should be required to motivate the boss, who was also a 22% shareholder at the time, to get out of bed in morning. Thus voiding the share options could be justified on the basis that Tesla\u2019s shareholders had voted without being given the full picture. McCormick got three cheers <a href=\"https:\/\/www.theguardian.com\/business\/nils-pratley-on-finance\/2024\/jan\/31\/three-cheers-for-the-delaware-judge-who-stood-up-to-elon-musk\" data-link-name=\"in body link\">from this column<\/a>.<\/p>\n<p class=\"dcr-1n1orvu\">Yet it\u2019s hard to applaud <a href=\"https:\/\/www.theguardian.com\/technology\/2024\/dec\/02\/elon-musk-tesla-pay-package\" data-link-name=\"in body link\">her continued insistence on blocking the award<\/a> after Tesla held a second \u201cratification\u201d vote in June and shareholders again <a href=\"https:\/\/www.theguardian.com\/business\/article\/2024\/jun\/13\/tesla-shareholders-approve-elon-musk-pay\" data-link-name=\"in body link\">gave a thumbs up to Musk\u2019s billions by a large majority<\/a>.<\/p>\n<p class=\"dcr-1n1orvu\">McCormick\u2019s argument this time is that Tesla\u2019s board was not entitled to hit \u201creset\u201d and \u201cwere the court to condone the practice of allowing defeated parties to create new facts for the purpose of revising judgments, lawsuits would become interminable.\u201d What\u2019s more, the information Tesla sent to shareholders was \u201cmaterially false or misleading\u201d because it claimed the second vote could override the early decision of the court.<\/p>\n<p class=\"dcr-1n1orvu\">That is more problematic. It is close to denying shareholders\u2019 wishes on the grounds of a legal technicality. If Tesla made fuller disclosures the second time, and if Tesla\u2019s owners still want to shower excessive and unnecessary rewards on Musk, at some point that\u2019s surely up to them. It may still have been misleading to say the court would accept the result of a second vote, but that objection feels incidental to the main argument. We\u2019ll see if this judgment will withstand an appeal.<\/p>\n<p class=\"dcr-1n1orvu\">In the meantime, take a step back from the legal quarrel and be amazed that the Tesla board, after McCormick\u2019s first ruling, didn\u2019t try to seek a compromise with Musk and talk him down to a less grotesquely obscene award. Instead, it took none of the governance criticisms on board and declared that it felt vindicated by the super, soaraway stock price. That was pure fanclub behaviour.<\/p>\n<figure data-spacefinder-role=\"inline\" data-spacefinder-type=\"model.dotcomrendering.pageElements.NewsletterSignupBlockElement\" class=\" dcr-173mewl\"><a data-ignore=\"global-link-styling\" href=\"#EmailSignup-skip-link-7\" class=\"dcr-jzxpee\">skip past newsletter promotion<\/a><\/p>\n<aside aria-label=\"newsletter promotion\" class=\"dcr-av5vqf\">\n<div class=\"dcr-10et71f\">\n<p class=\"dcr-rsfwa\">Sign up to <span>Business Today<\/span><\/p>\n<\/div>\n<p class=\"dcr-1xjndtj\">Get set for the working day \u2013 we&#8217;ll point you to all the business news and analysis you need every morning<\/p>\n<p><gu-island name=\"SecureSignup\" priority=\"feature\" deferuntil=\"visible\" props=\"{&quot;newsletterId&quot;:&quot;business-today&quot;,&quot;successDescription&quot;:&quot;Get set for the working day \u2013 we'll point you to all the business news and analysis you need every morning&quot;}\"\/><span class=\"dcr-1eusqlu\"><strong>Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our <a data-ignore=\"global-link-styling\" href=\"https:\/\/www.theguardian.com\/help\/privacy-policy\" rel=\"noreferrer\" class=\"dcr-1rjy2q9\">Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google <a data-ignore=\"global-link-styling\" href=\"https:\/\/policies.google.com\/privacy\" rel=\"noreferrer\" class=\"dcr-1rjy2q9\">Privacy Policy<\/a> and <a data-ignore=\"global-link-styling\" href=\"https:\/\/policies.google.com\/terms\" rel=\"noreferrer\" class=\"dcr-1rjy2q9\">Terms of Service<\/a> apply.<\/span><\/aside>\n<p id=\"EmailSignup-skip-link-7\" tabindex=\"0\" aria-label=\"after newsletter promotion\" role=\"note\" class=\"dcr-jzxpee\">after newsletter promotion<\/p>\n<\/figure>\n<p class=\"dcr-1n1orvu\">We\u2019ll see where the battle ends once it goes (probably) to the Delaware supreme court. But the craven stance of Tesla\u2019s board should not be lost in the legal back-and-forth. Nonexecutive directors are not meant to be this supine.<\/p>\n<\/div>\n<p><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<br \/><div data-type=\"_mgwidget\" data-widget-id=\"1660802\">\r\n<\/div>\r\n<script>(function(w,q){w[q]=w[q]||[];w[q].push([\"_mgc.load\"])})(window,\"_mgq\");\r\n<\/script>\r\n<br \/>\n<br \/><a href=\"https:\/\/www.theguardian.com\/technology\/nils-pratley-on-finance\/2024\/dec\/03\/musks-legal-battle-for-his-56bn-goes-on-teslas-board-still-looks-supine\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The first time around, judge Kathaleen McCormick of the Delaware court of chancery got it right. The $56bn pay package awarded by Tesla to Elon Musk in 2018 was indeed &hellip; <a href=\"https:\/\/hotvideos24.online\/?p=133069\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-133069","post","type-post","status-publish","format-standard","hentry","category-business","entry"],"_links":{"self":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/133069","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=133069"}],"version-history":[{"count":0,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/133069\/revisions"}],"wp:attachment":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=133069"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=133069"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=133069"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}