The board at Tesla is basically Elon’s buddies. There is no oversight or independence there, they do what he wants.
If law was applied equality to billionaires as it does to regular people, he would be in jail for fraud.
If law was applied equality to billionaires as it does to regular people, he would be in jail for fraud.
AFAIK, Robyn Denholm, Tesla’s chair, had no particular association with Musk prior to joining Tesla’s board. She is an Australian business executive with a history of working in senior finance roles in Australian and US firms. She was recruited on to Tesla’s board by another (now former) Tesla director, Brad Buss, who to my knowledge has never been that closely associated with Musk either. Musk obviously trusts and respects Denholm, but I believe their relationship is more professional than personal - Denholm lives in Australia and travels to the US for Tesla board meetings.
Has a court accepted that argument? I mean, you can come up with all sorts of grounds to claim an independent director isn’t really independent, but unless a court with jurisdiction accepts the argument, it doesn’t really count for anything.
My previously-unstated opinion is: remunerating directors like executives blurs the distinction between those 2 roles in ways that are likely detrimental to long-term shareholders.
Yes, a Delaware court. It’s why Musk’s pay package is contested and why Tesla redomiciled.
This is true at most companies with a competent CEO.
My uncle had an inimical board that tried to remove him, but he somehow replaced them all one by one before they could. Needless to say he replaced them with people who didn't want to remove him ("buddies"; but what kind of a leader surrounds himself with people that want him to fail?). He's never told me how he did that despite my asking several times.
Still, it's always worth considering these structures before one invests--especially in med-to-large-cap public companies.
Alternatively, in private small-cap and venture-boards, the seats are nearly always filled by founders and lead investors and I would argue that's a "good thing".
No it's not.
Competent CEOs hire boards that align with their world-view but are independent enough to provide useful advice. And almost all startup boards will have investors who definitely will not rubber stamp the sort of thing going on at Tesla.
Uh why would the Tesla board object to management creating more shareholder value than any other car company ever?
The other comment saying "the law is above shareholder gain" is kind of missing the point thought--the law in question is specifically to protect the interest of shareholders.