QUOTES | What investors and legal experts are saying about Musk’s voided $56bn pay package
A Delaware judge tossed out CEO Elon Musk's record-breaking $56bn (R1.05-trillion) Tesla pay package on Tuesday, calling the compensation granted by the EV maker's board “an unfathomable sum” that was unfair to shareholders.
Here are some reactions to the ruling:
KRISTIN HULL, FOUNDER OF NIA IMPACT CAPITAL, WHICH OWNS TESLA SHARES:
The court's decision “really speaks to the power of a shareholder to get involved when the board is not doing its job. We've seen the board is beholden to him. This is the bro-show.
“This company and this particular CEO see themselves as above the law in a lot of ways.”
ADAM BADAWI, PROFESSOR OF LAW AT UNIVERSITY OF CALIFORNIA, BERKELEY:
“If this ruling stands, it will put a sizeable dent into his net worth.
“I think essentially what the court is saying is, 'We're not literally taking money out of Elon Musk's pocket', though he certainly will feel that way because he hasn't exercised shares. The board can redo, they can give him a new grant in a way that has better process and in a way where the amount is justified by what matters to Tesla shareholders.”
ROSS GERBER, PRESIDENT AND CEO GERBER KAWASAKI WEALTH & INVESTMENT MANAGEMENT:
“The current board can't negotiate a new pay package for Musk because they've already been ruled non-independent. They need an independent board of directors and they're going to need to sweep out at least three or four directors to find independent people to negotiate the pay contract or it will be voided. Essentially the entire corporate structure of Tesla has been deemed not appropriate for a public company.”
JOHN COFFEE, PROFESSOR AT COLUMBIA UNIVERSITY LAW SCHOOL:
“He may appeal because he has little to lose from appealing. I would not expect the (Delaware Supreme Court) to reverse the chancellor but it certainly could happen. As for a 'shake-up of the board', it need not be that dramatic. One or two clearly independent directors are all that is needed.”
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