…look…I know I promised to dodge this bullet…& it’d be a self-inflicted gun shot wound in at least my case

The best analogy is Cleavon Little holding a gun to his own head as the new Sheriff of Rock Ridge in Blazing Saddles.

Except the townspeople were horrified, we're cheering him on on both sides of the pond. pic.twitter.com/3O5m2sFghl

— gary leff (@garyleff) October 5, 2019

…but…damn it all

Legal experts say Musk likely will be forced to return at least some of the stock options he secured as part of his 2018 pay package, an award that was — and remains — unparalleled in scope. “The plan is the largest potential compensation opportunity ever observed in public markets by multiple orders of magnitude,” Chancellor Kathaleen McCormick wrote in her opinion, “over 33 times larger than the plan’s closest comparison, which was Musk’s prior compensation plan.”

No matter how much Musk had to give up to pursue his many other ambitions, he could always trust that additional shares from the lucrative Tesla package were right around the corner. Now, legal experts said, McCormick’s ruling almost certainly will require Tesla to devise a plan to hand back Musk’s stock options.

Wall Street is still grappling with the gravity of the decision.
[…]
Late Wednesday, Musk announced on X that “Tesla will move immediately to hold a shareholder vote to transfer” the company’s incorporation from Delaware to Texas, home of its physical headquarters, after a poll of X users came out “unequivocally in favor of Texas!”

The Delaware ruling comes at a difficult time for Musk. His Tesla stake is now around 13 percent, well below the nearly 22 percent he controlled when the compensation plan was struck. It has dwindled as he sold stock to cover tax bills and other financial obligations since his $44 billion purchase of Twitter in 2022. Meanwhile, Tesla — which rose like a rocket to become the world’s most valuable automaker in 2020 — is encountering new challenges, including stagnating revenue from steep price cuts and the prospect of softening demand for its electric vehicles.

Musk faces more than financial losses. The nation’s premier business court ruled that members of Tesla’s board were “beholden” to him in a flawed compensation process that he heavily influenced. That ruling strikes at his power, his reputation and his carefully cultivated image as a rakish but brilliant entrepreneur and tactical genius.
[…]
“This ownership stake gave him every incentive to push Tesla to levels of transformative growth,” [McCormick] wrote, noting that “Musk stood to gain over $10 billion for every $50 billion” the company recorded “in market capitalization increase.”
[…]
McCormick said Musk used his “enormous influence over Tesla” to shape the package, leveraging his personal relationships with the board members who approved it, including longtime friends and his former divorce lawyer.

The ruling describes Musk as a “paradigmatic Superstar CEO” who “enjoyed thick ties with the directors tasked with negotiating on behalf of Tesla, and dominated the process that led to board approval of his compensation plan.” The result was a process that was “deeply flawed,” McCormick said in her ruling.

Moreover, the performance milestones set out in the agreement were supposed to compensate Musk for hitting “stretch performance goals.” But in reality the targets were conservative, the ruling said, rewarding Musk for growth that was in line with Tesla’s expectations.

“It is not clear how Tesla management reconciled their views that the milestones were both ‘risky’ and a ‘stretch’ yet simultaneously more than 70% likely to occur,” the ruling states.
[…]
Musk asked his followers on X (formerly Twitter) whether he should move Tesla out of Delaware; the poll results overwhelmingly show that he should. But Alon-Beck said he would face an uphill battle to relocate. Shareholders tend to prefer that public companies incorporate in Delaware because the state’s policies are so friendly to businesses and their shareholders, including lenient taxes, a higher degree of privacy and a court dedicated solely to corporate cases.
[…]
Any appeal, meanwhile, would land in the Delaware Supreme Court, which could affirm or reverse McCormick’s decision. While an outright judgment in favor of Musk is unlikely, said Ann Lipton, associate law professor at Tulane University, the court could send the case back to McCormick to revisit the reasoning behind some of her findings.
[…]
But the hit to his net worth wouldn’t necessarily be straightforward. Because so much of his wealth is tied to Tesla’s valuation, the potential shock to the company’s stock price could cause his net worth to tumble further than the $56 billion value of the options.

He would hardly be destitute: Musk still holds significant wealth in the form of his other Tesla shares, and his ownership in several other companies, including SpaceX and the Boring Co. Musk made his fortune early on with PayPal, which he co-founded. He pocketed $165 million from its sale to eBay.

Musk invested in Tesla in 2004, a year after its founding, and became its chief executive in 2007.[…]

Musk is notorious for his lack of liquid wealth — most of his money is tied up in stock or equity in private companies. The shares are valuable not just for their monetary potential, but because he leverages them to take out personal loans and make other investments.

There have been times when Musk has put down more than half his Tesla shares as collateral for loans. Musk was able to buy Twitter because he used Tesla shares to back his $44 billion offer, which was also supported by a $13 billion loan.

But losing the Tesla options could put a squeeze on all of Musk’s bets — tanking thecompany’s share price and jeopardizing his ability to cover his financial commitments. X is now estimated to be worth around a quarter of what Musk paid for it — and he owes roughly $1 billion in interest annually.

“He’s just working with a much thinner margin and a much smaller net,” said Eric Talley, a professor of law and co-director of the Millstein Center at Columbia University.

https://archive.ph/D95jx of https://www.washingtonpost.com/technology/2024/02/01/musk-tesla-compensation-package-delaware/

…&…myo doesn’t like it when anyone who isn’t farscy…because farscy’s special…forgets to pick a category…so…I nearly tagged this as “finance”…but…it’s not finance…not as a post, anyway…so I went with…opinion…as in “in my not-necessarily-humble opinion this guy is a worthless piece of shit & the only remarkable thing about him is the force multiplier the balances behind him boosted his unearned conceit by to such unheard of realms of the sort of confidence tricks that are mysteriously not as illegal as it really seems like they must be somewhere along the way”…I mean…the guy is a cartoon villain

…no…no…remember which gig the flamethrower stunt was for?

…yeah…the monorail sorry…hyperloop…boondoggle…that’s worth a few billion & only cost a viable public transport network or two so it’s clearly an absolute steal

…if only we were as rich-on-paper smart™…we could have built out the volcano lair by now & be sipping boat drinks off the private jetty…that’s what you get for not having apartheid-era mining millions in the piggy bank when you picked who to be born to like a real self-made smart guy would have…god…stop being so jealous…just because joe rogan thinks he’s cool…you’re gonna jump of a cliff, too?

…what do you mean that’s not how that saying goes…you telling me you & joe aren’t friends any more or something

…anyway…you’re probably right…I ought to apologize

…it’ll be that jealousy getting to me, I expect

…anyway…this kind of thing could be described as an exercise in self-harm…& you know what they say about that sort of thing

…so…probably best if I just…take a load off

…& not start getting things off my chest when I still haven’t found a firm enough footing in the fundamentals of the thing to be getting into forecasting…or, indeed…wish-casting…like the people who believe in this brand of…well, the lawyers tell me I’m meant to call it “benevolence” & be thankful

…but…well…mekon…I mean…elon…if you’re reading this…little throwback to the free speech thing for you…know you love those…they’re…like…your favorite shit, right…after being so rich & universally beloved & everything

…&…*checks notes*…really shit puns in inapposite places…so you’ll love this bit