Hacker News Reader

Comment by skinnymuch | Hacker News Reader

The Musk package doesnt seem that bad. Did any one think the metrics would have actually been met so soon? The ones after the first one he got are even crazier.

Yeah stock price as the main or sole focus for rewarding doesn’t make a whole lot of sense.

View on HN

The Musk package is financial genocide. The guy owns a ton of shares already, his incentives were totally aligned...think about this way: he owns 17% of the company already so 17% of the package comes from Musk himself, the rest comes from everyone else...that should make clear exactly what is occurring. The economics are totally fucked, he is getting paid 10% of the market cap in a year...when he isn't hitting targets (and the guy is borrowing money like crazy...I think he has borrowed something like $60bn, I don't think anyone has soaked a company this badly...I have certainly never seen anything like this in a company that wasn't fraudulent). It is amazing that no-one has sued the Board (but, again, the problem today is that these investors don't really exist anymore, the largest active investor in TSLA has a 1.5% stake).

This is the kind of thing that people will write about in 20 years and be like..."wow, that actually happened, no-one did anything".

I thought he owned over 19% from the get go before any awards.

I also read he was getting the equivalent of near 1% of the company’s total stock in the first or second award

> he is getting paid 10% of the market cap in a year

So is my previous statement incorrect? Where is he getting $60-90B in a year from?

Here is a link listing his awards so far:

https://observer.com/2020/10/elon-musk-tesla-performance-bon...

It adds up to a bit under $9B when the market cap was more than 2x lower. We are still talking about around 3% of the market cap.

—-

If you mean to say he will get 10% if he meets every tranche. I don’t see why that is such a big deal. Tesla’s absurd market cap is where it is because of him.

> loans..$69bn

Is there any source for this? This seems incredibly insane. A couple billion in loans makes perfect sense. Why would he even want double digit billion dollar loans?

No, that is not right. He got paid $20bn last year, and is getting paid more this year. One thing that tends to be confusing for people is that a dollar amount is not being paid, so if you issue shares 100 shares at $100/shares, and the value of the company rises to $200 share then the "value" of the award it not $1k. Giving away shares or paying huge stock-based comp is basically saying that your company is worthless (this is a principle that existed for years before, in tech this has been totally bastardized as employees/managers have looted companies).

It is a big deal. It is the biggest comp deal of all-time by tens of billions. As I also explained at great length, it makes no sense because he already had a big position in the stock. The idea that you need to pay someone $20-50bn/year to do a proper job when they are already worth $150bn is...grotesque (I am a big capitalist, I am not in the US but, if I was, I would be a socialist...in Austin, you have people living in tents under almost every bridge, and you have Musk cosplaying as a working man in his $50k house in the same city...whilst he is trying to get rid of his $100m in property elsewhere...it is utterly grotesque, it makes no fucking sense, it isn't a meritocracy, it is feudalism...no-one who is as rich as him has ever demanded share awards like this, no-one, it just doesn't happen because no-one who has this much money is actually that greedy...they can't spend it, so what is the point...it is impossible to look at Musk's actions and not think: "there is something seriously wrong with this person").

Tax avoidance. SpaceX. Other self-aggrandizing nonsense projects. Because TSLA is self-evidently overvalued.

Not sure if you saw my edited comment or not. You responded 5 hours later so I don’t think I could have still edited that much later.

> no that is not right

What is incorrect about my $9B figure? I said that was the financial amount when the stock was over 2x lower. In line with your $20B figure.

You didn’t answer how he is getting 10% of the market cap in a single year. The awards are about giving him roughly 1% (1.7m or so shares) each time at a low option price. Obviously dilution will take effect. So how would or did he get 10% of the market cap in a year?

You also didn’t explain anything about the $60B of loans.

> because no-one who has this much money is actually that greedy

Is this why Elon is so upsetting? Because you believe [current] [ultra] wealthy people aren’t that greedy?

The amount of evidence that could go into how insanely greedy and “evil” things incredibly wealthy people do is innumerable. Right off the top of my head I thought of a handful of examples of completely screwed up shit ultra wealthy have done.

You brought up tax avoidance. That is the most un-unique thing that a wealthy Elon can do.

> I am a big capitalist

So I don’t see how this is a big deal especially if you’re a big capitalist in 2021. In what way has the world shown stuff like this won’t happen under the majority of the countries that are some form of capitalism.

What would you want capitalism to do to stop Elon Musk then?

I am not a big capitalist or one at all, so, again, Musk’s stuff doesn’t seem to be a big deal at all. As you said. He’s able to pull off his brand like being the common man really well. Tesla is so highly linked to him. Tesla unlike most explosions of stock values began before the pandemic.

Is there any one who isn’t some extremist or Tesla fanboy to the max who actually thought Musk would be able to meet a handful of the awards in 2020 and on? Or any one that didn’t think Tesla market cap at its current amount was remotely possible to happen in 2020 and 2021?

Reply on news.ycombinator.com