Ok I don’t have the highest opinion of modern corporations, but even I am pretty floored by this, maybe I’m too naive. Elon Musk just reached in the till at Tesla and pocketed 55 BILLION!
I’ve never had a high opinion of him, and even before this IMO he’s done more than any socialist thinker or activist in history to dispell the myth that the super rich deserve all their riches because they got that way by skill, talent and intelligence.
But with this news I’m seriously considering the possibility he’s a trotskyist infiltrator trying to bring down the capitalist system from within.
Seriously (and I mean this genuinely) how the fuck is this any different from a business owner cooking the books and walking away with the money in the till? I get legally it probably is, but morally this seems no different at all to me.
And why the fuck did the shareholders vote for this? I’m assuming most of them are actually professional investors rather than Elon fan boys. What possible justification for this is there? Apparently Tesla makes 5 grand profit per car. So they will have to sell 10 million cars (twice as many as they have sold in their entire history) just to pay this back, before then no one else sees a cent.
I get Elon is a famous figurehead but FFS no one can seriously think he’s actually practically contributing to the success of the company in anyway and certainly not 55 BILLION worth of contributions.
It isn’t. I mean, the money in the till literally belongs to the business owner. It’s his money, if he wants to reach in and take it to go out and buy a sandwich, it’s perfectly fine.
Obviously, he still has to accurately report his income and expenses to the government, but there is nothing morally or ethically suspicious about a business owner taking out money from the business he owns.
So too, if the owners of Tesla want to pour billions of dollars into Elon’s pocket… it’s their money. I suppose Tesla owners who disagree may be VERY unhappy with the result of this vote, but that’s what lawyers are for.
Except it’s a publicly traded company, he’s just the CEO so it’s not his money, so if he did that he would absolutely be breaking the law (I thought even a regular LLC you’d also be breaking the law, even if you were the majority shareholder?)
To me that’s no different morally than than somehow cooercing the shareholders to hand over this cash.
The shareholders are under no obligation to vote yes, if they choose to vote yes, it’s because they think yes is the best way for them to earn more money. It is their money to flush down the toilet.
I did say business owner here but I actually meant founder/CEO.
Though in most cases that’s what we mean by “small business owner”. How many small businesses are actually run as private entities without liability for the people that run them?
If you can reach into the till at any time that also means the debts of the company are also your debts.
Sounds like this pay package would be options to buy Tesla stock at reduced price. If the shareholders approve this it has no bearing on company operations, no money out of the till. It could be reducing the value of shares held by others so he would need approval of the shareholders or board. He claims he has tacit approval for that.
I get this is true legally, but morally when you are talking about giving the GDP of Tunisia to a fuckwad with no appreciable skills, that is objectionable. We should change our laws so this does not happen, it is neither moral or a good thing for the economy. One of the most valuable car companies on the planet just saddled themselves with a pointless debt worth twice as much as all the profit they have made on every car they’ve ever sold.
Not only that, everyone knows the reason the fuckwad question is demanding this cash is he got stoned and promised to buy Twitter, signed a contract that was worth far more than it was worth (and wrote the contract in a way he couldn’t get out of it), then completely ran Twitter into the ground and is never getting his money back.
Yeah that is morally extremely questionable and not something that would be allowed in an ideal economy.
Just for the record, Musk is not Tesla’s founder (at least, not, original founder). It was founded in 2003 by Martin Eberhard and Marc Tarpenning; Musk came in, in 2004, to become their largest shareholder, and then became CEO in 2008. Eberhard and Tarpenning both left in 2007/2008, and depending on whose narrative you wish to believe, they had been forced out by Musk.
However, a lawsuit settlement allows Musk (along with Eberhard, Tarpenning, and two other early employees) to all refer to themselves as “co-founders.”
I don’t think that’s true. I mean a fundamentally a publicly traded company is funded by its shares. If you sell a bunch of shares for 55 billion less than they are worth that is 55 billion less they have “in the till”
It’s probably not the same as taking on 55 billion of debt, though that is true (I think IANAA, I Am Not An Accountant )
Tesla shareholders own the company, Tesla shareholders decide what happens with the company. If Tesla shareholders want to, they can turn the company’s factories into theme parks, or parking lots, or just close them all down and let them rot in place. They can choose to sell every asset the company has and give every penny to a charity created for the benefit of convicted serial killers.
None of that money is in the till. It’s stock being traded separately. The inherent value of the company based on it’s sales and profitability remains the same. The value of the shares may decrease but the shareholders can vote to allow that if they want. The corporation can create more shares to sell if they want to raise money.
It is though. Fundamentally that is how shares work. I don’t have the cash to make a electric car company happen, and even if I did, if spent my entire savings founding an electric car company and it failed I’d be destitute. Instead I can sell shares of my electric car company for rich people to buy. Now I have the money to build my electric car factory from those shares I sold. But if the company fails no one is liable for the whole thing, only for the cost of the shares they brought and are now worthless
If I decide to sell some shares for less than they are worth that is less money for me to spend on making electric cars.
But you’re trying to encourage this really smart guy to buy shares so he stops caring so much about his social media company and pays attention to your company instead.
Yes, it’s stupid, but business owners are allowed to be stupid.
Fools and their money I guess. It won’t affect me since I have no Tesla stock or interest in buying any of their cars. But I do feel sorry for the California state teachers whose retirement fund holds nearly a billion dollars worth of Tesla stock.
Interestingly this news seems to have had little if any affect on the stock price. THis is probably because as others have said above, it isn’t actual real money its theoretical pieces equity in the company that Musk can’t use for another 5 years. Comparing Tesla’s stock to its actual earnings, Tesla’s value appears to be based primarily on the greater fool principal and these options might as well be Trump NFTs.
By the time the 5 years are up, its entirely possible that Tesla’s bubble will have burst and the price may have come back to reality so that in the end it will be worth much less than the current $55 billion. On the other hand if this deal is what is needed to provide the Musk magical fairy dust that keeps Telsa’s stock price disconnected from reality it may be worth the price.
Though what makes that fundamentally more acceptable morally than say what Bernie Madoff did? Why didn’t we just say then, that’s dumb they shouldn’t have given him all their money?
Because he didn’t use the money for what he said he was going to. There’s nothing deceptive about what Musk is doing. Stock is the property of the shareholders. They can choose to create more stock to sell to raise money if they choose but that’s just another one of the decisions they have a right to make. Issuing stock options or trading existing stock does nothing to the till. It isn’t necessarily the wise thing to do, but again, that’s up to the stockholders.
But ponzi schemes aren’t illegal because God handed down a stone tablet detailing how securities fraud laws should work. We decided as a society that certain actions by business owners and managers are immoral and bad for society, and made them illegal, and some are not.
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