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The mission of Tesla is to maximize value to its shareholders

sandworm101 2y ago
Or shareholder, when one controls all the levers.
lern_too_spel 2y ago
Not quite. Tesla's mission is to do what its voting shareholders want. Usually, shareholders want to maximize their returns, but Tesla's shareholders voted to reduce their returns to overpay Musk for work already done.
- throwadobe 2y ago
  Presumably because they believe keeping Musk will increase value long term, so they are still maximizing the value of the future cashflows discounted to the present. The size of Musk's ownership stake adds another layer to this metric, but at the limit, that really that just means the words "they" in my previous statement can be replaced with "Elon Musk"
  - lern_too_spel 2y ago
    No, the reason most voters gave is that the payment was promised, not that it maximized their returns. There are any number of projects that Tesla could spend $50 billion on that would provide a greater return to investors than giving it to Musk. Even giving him a fraction of that would have been enough to retain Musk over giving him nothing, if they really believe Musk's leadership will be positive for future returns.
  - verzali 2y ago
    I suspect many Tesla shareholder believe they are investing in Musk, rather than just Tesla. That explains much of their behavior.
throw0101d 2y ago
> The mission of Tesla is to maximize value to its shareholders That is one philosophy: * https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine * https://en.wikipedia.org/wiki/Shareholder_primacy https://en.wikipedia.org/wiki/Shareholder_primacy It is not the only one: * https://en.wikipedia.org/wiki/Stakeholder_theory https://en.wikipedia.org/wiki/Stakeholder_theory * https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-value-myth/ https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-v...
- throwadobe 2y ago
  The shareholders literally own the company, so they are the ones who get to decide what gets maximized. Most shareholders decide they want returns to themselves to be maximized. Not all will in every single company at every point in time, but it's likely the case 99.9% of the time.
  - throw0101d 2y ago
    > The shareholders literally own the company […] They do not actually. * https://archive.ph/VCUp4 https://archive.ph/VCUp4 / https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9896 https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9... * https://www.pqmagazine.com/the-myth-of-shareholder-ownership/ https://www.pqmagazine.com/the-myth-of-shareholder-ownership... * https://www.forbes.com/sites/petergeorgescu/2021/07/21/the-shareholders-are-not-the-owners-of-a-corporation/ https://www.forbes.com/sites/petergeorgescu/2021/07/21/the-s... * https://edwardslaw.ca/blog/shareholders-agreements-in-canada-corporate-law/ https://edwardslaw.ca/blog/shareholders-agreements-in-canada... * https://www.ippr.org/articles/who-owns-a-company https://www.ippr.org/articles/who-owns-a-company * https://www.cambridge.org/core/journals/journal-of-institutional-economics/article/abs/who-are-the-owners-of-the-firm-shareholders-employees-or-no-one/587374B0969C7F1A3566F70D97732399 https://www.cambridge.org/core/journals/journal-of-instituti... They have certain claims, but so do customers, suppliers, employees, governments (taxes), bond holders, etc. The claims of shareholders come last, which is why owning stock gets you higher returns (than, e.g., bonds from the company): you're at highest risk of losing money from being last on claims, so you should be rewarded for that higher risk.

Or shareholder, when one controls all the levers.

Not quite. Tesla's mission is to do what its voting shareholders want. Usually, shareholders want to maximize their returns, but Tesla's shareholders voted to reduce their returns to overpay Musk for work already done.

throwadobe 2y ago
Presumably because they believe keeping Musk will increase value long term, so they are still maximizing the value of the future cashflows discounted to the present. The size of Musk's ownership stake adds another layer to this metric, but at the limit, that really that just means the words "they" in my previous statement can be replaced with "Elon Musk"
- lern_too_spel 2y ago
  No, the reason most voters gave is that the payment was promised, not that it maximized their returns. There are any number of projects that Tesla could spend $50 billion on that would provide a greater return to investors than giving it to Musk. Even giving him a fraction of that would have been enough to retain Musk over giving him nothing, if they really believe Musk's leadership will be positive for future returns.
- verzali 2y ago
  I suspect many Tesla shareholder believe they are investing in Musk, rather than just Tesla. That explains much of their behavior.

throw0101d 2y ago

> The mission of Tesla is to maximize value to its shareholders That is one philosophy: * https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine * https://en.wikipedia.org/wiki/Shareholder_primacy https://en.wikipedia.org/wiki/Shareholder_primacy It is not the only one: * https://en.wikipedia.org/wiki/Stakeholder_theory https://en.wikipedia.org/wiki/Stakeholder_theory * https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-value-myth/ https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-v...

throwadobe 2y ago
The shareholders literally own the company, so they are the ones who get to decide what gets maximized. Most shareholders decide they want returns to themselves to be maximized. Not all will in every single company at every point in time, but it's likely the case 99.9% of the time.
- throw0101d 2y ago
  > The shareholders literally own the company […] They do not actually. * https://archive.ph/VCUp4 https://archive.ph/VCUp4 / https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9896 https://www.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9... * https://www.pqmagazine.com/the-myth-of-shareholder-ownership/ https://www.pqmagazine.com/the-myth-of-shareholder-ownership... * https://www.forbes.com/sites/petergeorgescu/2021/07/21/the-shareholders-are-not-the-owners-of-a-corporation/ https://www.forbes.com/sites/petergeorgescu/2021/07/21/the-s... * https://edwardslaw.ca/blog/shareholders-agreements-in-canada-corporate-law/ https://edwardslaw.ca/blog/shareholders-agreements-in-canada... * https://www.ippr.org/articles/who-owns-a-company https://www.ippr.org/articles/who-owns-a-company * https://www.cambridge.org/core/journals/journal-of-institutional-economics/article/abs/who-are-the-owners-of-the-firm-shareholders-employees-or-no-one/587374B0969C7F1A3566F70D97732399 https://www.cambridge.org/core/journals/journal-of-instituti... They have certain claims, but so do customers, suppliers, employees, governments (taxes), bond holders, etc. The claims of shareholders come last, which is why owning stock gets you higher returns (than, e.g., bonds from the company): you're at highest risk of losing money from being last on claims, so you should be rewarded for that higher risk.