Subject: Re: 13F : More Chevron
skyesix:
Actually no. First, some the metrics were based on EBITA (earnings before everything that matter) hitting those targets didn't necessarily help the longs. But more importantly, Musk's stock grants diluted the value of existing shares, and by a non-trivial amount too. So they absolutely reduced the value of the longs' investment.

Sorry, simply incorrect. EVERY milestone required a combination of production, earnings, AND STOCK PRICE to be met. It was not possible for Musk to meet and collect on a milestone without the longs having earned, collectively, something like 10X as much as Musk earned for meeting that milestone.

Further, Musk was precluded from selling any of the shares he earned for 5 years. So to the extent he did some Micky Mouse BS to meet the milestones, the stock price would long since have fallen back to earth after 20 quarters had gone by. What do they say the stock market is in the long run? (A weighing machine for those of you new to this.)

In any case, in the actual event, when this ruling was made, actual real stockholders who owned actual real shares in TSLA in 2018 when the compensation agreement was agreed to are sitting on a 10X gain as the Delaware Chancery is ruling that 2018 deal as having not been sufficiently in the stockholders' interest to pass muster as something the board could have or should have recommended. The emperor has no clothes. I am shocked, shocked I tell you to discover that CEOs who lead their companies to $550 billion of higher market cap might be worth being paid $55 billion.

And the stupidity of the ruling, the reporting, and the analyses! Here is a partial list of The Greatest Misses on this whole topic:

1) WRONG: The board agreed to pay Musk $55 billion for $550 billion of Market cap improvement. The value of the pay package, the options, that were assigned to Musk that he might pick up if he met every milestone, was $2.8 billion in 2018. If it had taken TSLA 5 years to double its Market Cap under Musk, his pay package would have "cost" 2018 TSLA only $280 million, or $56 million per year. And for that money, the longs in the company would have seen their net worth increase by about $55 billion. But of course Musk did 10X better than that, as it turns out. And no one but the "fan boys" thought that was possible.

2) WRONG: Musk was already making 20% of any stock price gains he made so he didn't need to be compensated at all to work on Tesla. The Judge literally said in her ruling that the board was so in Musk's pocket that they paid him $55 billion when they could have paid him nothing, he still would have been motivated to do the work. How stupid do you have to be to take that seriously? If the board had offered him nothing to work at Tesla, Musk would have STILL made 20% of any TSLA stock price rises without having to show up in Fremont for even an hour! He did not need to sleep in a conference room while getting the production line to build 3's and Y's by the thousands per week. Its not like he didn't have other opportunities. THIS the judge uses as evidence that the board was not properly negotiating with Musk. Idiot.

3) WRONG: Musk was not giving Tesla 2X as good a deal as the typical Hedge Fund manager since Hedge Fund managers charge 20% of the gains they supervise while Musk's agreement ultimately gave him 10% of the gains TSLA made when the Market Cap increased by $550 billion. The judge literally said Musk was paid 20% of the gains he made because he already owned 20% of the company, so the board did not need to pay him at all to keep him adequately motivated to work at TSLA. This is her evidence that the board was in Musk's pocket. But seriously, none of her clerks, hell the goddamn bailiff could have figured this out, was able to tell her what happens when a hedge fund manager owns 20% of her own fund? Even though the managers 20% ownership guarantees the manager will make 20% of all gains, SHE STILL CHARGES YOU 20% OF YOUR GAINS IF YOU INVEST WITH HER. If, as the judge seems to think is possible, the board was able to hire somebody else to bring TSLA from $55 billion to $600 billion in market cap, then MUSK would have made 20% of that gain without having to do any work! And he could have put his time in on other ventures, its not like he didn't have other choices.

4) WRONG: The fact that the Board characterized their task as fashioning a pay package that suited Musk to keep him working at TSLA "proves" that the board was not independent. If I am charged with getting a job done, and I find a candidate who can do the job, and I can't find another candidate that I think can do the job, and the job is worth from $60 billion up to possibly $550 billion to me and my stockholders, what do I do? I spend 6 months negotiating with that guy, wooing him, telling him how great he is, and seeing if I can POSSIBLY get this guy on the hook for $2.8 billion current value of options which I will only have to give him if the job gets done to the tune of being worth $550 billion more than when he started. That doesn't mean I am in the guys' pocket, it means I am a savvy negotiator able to close deals that will make me and my stockholders' rich.


Well that felt good. You don't have to like Musk or think it was smart to invest in Tesla. You only have to wonder about a judge who wishes to cure the harm of the stockholders whos harm consists of "only" having a 10 bagger since 2018. You have to know THE FIX IS IN, when the board and the CEO can be punished because the CEO got rich off of making everybody else rich, those poor victims.

I am one of those stockholders and I do not feel HELPED AT ALL by the Delaware Chancery Court. I am outraged in fact. EVERYBODY who has started a car company since 1945 has failed, EXCEPT TESLA. Oh help me! I only made 1000% on my stock!

Idiots.

R:)