Texas Tempts Tesla
Elon Musk’s pay, FTX’s potential full recovery, too much wind power and everything is securities fraud at Boeing.
I can tell you, if you want, the rules that apply to Elon Musk’s pay as chief executive officer of Tesla Inc. under Delaware corporate law. They are long and boring, a lot of exceptions to exceptions, but to quickly summarize: The board can pay Musk whatever it wants, unless he is a “controlling shareholder,” in which case the pay has to be “entirely fair,” though if the shareholders vote to approve the pay then that probably makes it “entirely fair,” unless the shareholder vote is not fully informed, in which case a judge gets to decide if it was “entirely fair,” which requires a “fair process” in which the board negotiates with Musk at arm’s length, and also a “fair price” in which, you know, the judge decides if Musk is worth the money.
This week a judge decided that Musk is not worth the $55.8 billion that Tesla’s board agreed to pay him in 2018, and wrote a 200-page opinion explaining and applying those rules. You can read the opinion, or my post about it yesterday, for a fuller explanation of these rules and how the judge applied them. But I would say that my two main points yesterday were: