5 ms·
Tesla's $2.6B Musk Award Too Costly, Glass Lewis Says
- kristianp 9y agoRequires registration to read.
- kencausey 9y agoOr something like uBlock Origin set to block everything.
- frgtpsswrdlame 9y agohttps://outline.com/NjJLxf https://outline.com/NjJLxf
- frgtpsswrdlame 9y agoThere should be some sort of law that prevents this. Musk's companies have taken over 5 billion in government subsidies, why are my tax dollars going towards the creation of billionaires?
- djcj88 9y agoBecause those people are smart and they've built the world you live in.
- deleted 9y ago[deleted]
- John_KZ 9y agoThe subsidies do have a reason to exist, but I agree that they're misdirected. They could directly fund R&D of battery/EV/aerospace technology instead of subsidizing luxury vehicles that only serve as a novelty for the rich.
- imron 9y agoMusk's entire strategy revolves around using luxury vehicles for the rich to directly fund R&D of battery and EV tech. That's been the gameplan since day 1.
- zaroth 9y agoThe subsidies are directly funding R&D of battery/EV/aerospace technology. But this way, the rich people buying the cars are also funding it, as well as the investors buying equity. The tax incentives are working precisely as they were designed, and for every dollar in subsidy there’s probably $9 more in outside investment coming onboard.
- frgtpsswrdlame 9y agoThe subsidies are directly funding Musk's wallet as much or more than they are funding battery research.
- alakin 9y agoI get that you have strong feelings. But this is just uninformed. If you took a sec to understand Musk's comp structure you'd see that its paper wealth, as in he doesn't take cash out of the company. Instead he puts cash in the company. Also he only sold stock to pay taxes. I'd guess its likely he paid more in taxes than you, if you're an average earner.
- zaroth 9y ago~$600 million in taxes actually.[1] But strangely nobody seems to subtract that amount from the value of the electric vehicle credits... Anyone who's been there and done this knows that what the IRS giveth with one hand, the IRS taketh away with the other. The house never loses, and there is no house like the United States Government. [1] - https://www.bloomberg.com/news/articles/2017-04-21/tesla-s-musk-paid-at-least-593-million-in-income-taxes-in-2016 https://www.bloomberg.com/news/articles/2017-04-21/tesla-s-m...
- 9y ago
- erikpukinskis 9y agoGM makes more off the subsidies than Tesla. Does that bother you too?
- frgtpsswrdlame 9y agoYes!
- toomuchtodo 9y agoLuckily they have helped stoke the electrification of transportation despite your protest. My condolences.
- frgtpsswrdlame 9y agoYeah they've stoked CEO payouts and golden parachutes and stock dividends just as much as they've stoked transportation. If corporations need government money to be forward-looking then I want some of that profit coming back to the government, not just going out to the investor class.
- aphextron 9y agoAccording to the article the board feels this is necessary to ensure Elon's focus is with resolving Tesla production issues, and not his other projects (SpaceX). He tries to create this superhuman "ironman" persona in the media, but the reality is no single person can possibly run all of these companies effectively, and investors are calling him out on that.
- feniv 9y agoThe article doesn't go into much details of the stock award. Musk is proposing not taking a salary for the next 10 years and receiving a 1% stock award each time he meets some insanely aggressive milestones: https://cdn.teslarati.com/wp-content/uploads/2018/01/Tesla-CEO-Elon-Musk-Performance-Award-e1516720893456.jpg https://cdn.teslarati.com/wp-content/uploads/2018/01/Tesla-C... http://ir.tesla.com/releasedetail.cfm?releaseid=1054948 http://ir.tesla.com/releasedetail.cfm?releaseid=1054948 I'm not a TSLA shareholder, but tying CEO performance to company performance rather than an indifferently high salary seems reasonable to me.
- John_KZ 9y agoOr you just allow the CEO to pump and dump the company, because the 1%/year stock will be absolutely massive while riding the hype and when things go south he can just quit and buy half the bahamas. There are much better ways to tie CEO performance to company performance that don't include amputating company stock every time your CEO is paid.
- wand3r 9y agoIt is a $50B a year target for 12 years, so ya if he "pumped" up the stock by pretty much doubling the current market cap 2 full times over the next 4 years then he could "dump" it straight away. So the argument is that taking the company from ~50B to $650B would create such shareholder value that it would be worth it. It is actually tied to revenue and profit as well. > Tesla has set a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion and so on, all the way to a market value of $650 billion. In addition, the company has set a dozen revenue and adjusted profit goals. Mr. Musk would receive 1.68 million shares, or about 1 percent of the company, only after he reaches milestones for both. [1] [1]https://www.nytimes.com/2018/01/23/business/dealbook/tesla-elon-musk-pay.html https://www.nytimes.com/2018/01/23/business/dealbook/tesla-e...
- freddie_mercury 9y agoMusk already owns tons of Tesla story and should be motivated by that. There's absolutely no evidence that additional equity would motivate him more. On the contrary, there is plenty of evidence on the diminishing marginal utility of wealth. Like much CEO pay, Musk's pay package is more about status than about motivating him. Or is someone really going to try to make the case that he's kinda half-assing it right now?
- joncrane 9y agoIsn't this setting up a bizarre incentive where every time each of the entities feels it isn't getting it's fair share of Elon's attention, that they have to bribe him with some massive stock grant?
- lopmotr 9y agoWhy not? Eventually they would end up paying him just a bit less than the value he provides, which is what you'd expect from any fair employment agreement. At some point it would be cheaper to let him go or let him not try very hard.
- AndrewKemendo 9y agoThese are the same people projecting that Apple should have sold 80M iPhone X's...and then apple "fell short" of estimates when they sold 77M [1]. Why do people listen to these proxy advisory services like Glass Lewis [2]? Honestly, none of them have anything near a good track record or are worth anything [3]. They are effectively like tabloids for the financial markets. Honestly, I'd love to hear from someone on wall street what value these "analysts" provide? [1] https://www.recode.net/2018/2/1/16961202/apple-iphone-x-china-airpods-christmas-q1-2018-earnings-charts-analysis https://www.recode.net/2018/2/1/16961202/apple-iphone-x-chin... [2] https://en.wikipedia.org/wiki/Glass_Lewis https://en.wikipedia.org/wiki/Glass_Lewis [3] https://www.economist.com/news/finance-and-economics/21594358-bear-market-or-bull-analysts-give-bad-advice-consistently-wrong https://www.economist.com/news/finance-and-economics/2159435...
- deleted 9y ago[deleted]
- dahdum 9y agoThey explain their reasoning and do the boring legwork, even if you don’t agree with their conclusion you can still find value in their analysis.
- V2hLe0ThslzRaV2 9y agoAppears Glass Lewis & Co currently maintains approximately 37% of the market share for proxy advisory services - but does that mean that all of their clients vote as per Glass Lewis reports recommend? If so, given they collectively advise $20 trillion worth of assets, would someone please explain why this is not toxic to a free market. SOURCE: https://en.wikipedia.org/wiki/Glass_Lewis https://en.wikipedia.org/wiki/Glass_Lewis
- deleted 9y ago[deleted]
- JumpCrisscross 9y ago> given they collectively advise $20 trillion worth of assets, would someone please explain why this is not toxic to a free market They're recommendations. Reading board proposals and working out the consequences of CEO pay packages is (a) hard and (b) not particularly rewarding. Instead of every investment firm having someone doing hard and non-rewarding work, they outsource it to these proxy advisory firms. Keep in mind who these advisory firms' customers are: the investors. It could be impolite for XYZ shareholder to publicly vote against Elon Musk. It is easier to call one's proxy advisory firm and let them know your thoughts. (It would also be more effective, from a political perspective, at achieving her goal.) (Nitpick: they advise in respect of $20 trillion of assets. They don't make buy/sell decisions.)
- tbabb 9y agoThey should probably be spending that money on building cars. I doubt that "more money" would make much of a dent on what Elon's motivations really are.
- JumpCrisscross 9y ago> They should probably be spending that money on building cars It's a performance-triggered stock award in lieu of cash salary.
- tbabb 9y agoThey should still be spending that on cars.
- kevin_thibedeau 9y agoWasn't Tesla having revenue problems not too long ago? Seems like someone is looking to flee a leaky ship by opening up some new ones.