# I pit Elmo and his Tesla heist **URL:** \ **Category:** The BBQ Pit\ **Created:** [June 13, 2024, 2:21pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838 "2024-06-13T14:21:26Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![Pardel-Lux](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pardel-lux/32/20182_2.png) [@Pardel-Lux](https://boards.straightdope.com/u/Pardel-Lux)\ **Post date:** [June 14, 2024, 4:05pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/101 "2024-06-14T16:05:14Z")
> [@Dr.Strangelove](#): > > Except that Musk and his brother recused themselves from the compensation vote, and it still passed easily. Ah, OK, that was not reported in the newspaper I read. Still a bad idea, IMO and in the reasoning of the NYT too, if that counts as an endorsement ([gift link](https://www.nytimes.com/2024/06/11/opinion/tesla-elon-musk-pay.html?unlocked_article_code=1.zk0.GQwS.BHDJy7EEpioe&smid=url-share)). ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [June 14, 2024, 4:05pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/102 "2024-06-14T16:05:34Z")
I’m not seeing what the fallout is if Tesla shits the bed and its stock price craters. It’s not like that’s going to crash the economy on its own, and to some degree that’s the point of allowing this sort of freedom- it punishes stupidity and rewards being smart about this kind of thing. Let the chips fall where they may; if _you_ don’t like it, don’t invest in Tesla or funds that do. And what if it turns out to be a good decision? What’s the argument for having regulated it such that it never could have happened? ---
**Author:** ![griffin1977](https://avatars.discourse-cdn.com/v4/letter/g/977dab/32.png) [@griffin1977](https://boards.straightdope.com/u/griffin1977)\ **Post date:** [June 14, 2024, 4:28pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/103 "2024-06-14T16:28:52Z")
> [@bump](#): > > And what if it turns out to be a good decision? What’s the argument for having regulated it such that it never could have happened? There is zero (or so close to it as makes no difference) chance of that happening. This payment is twice the profit Tesla has made in its history, absolutely nothing Elon could do would be worth that, even if he was some kind of visionary genius and his ever utterance was prophetic insights (which he is absolutely fucking not). Yeah there is a chance that Tesla will recover and succeed as a company, but that will be _despite_ this heist not because of it. This payout makes that outcome significantly less likely. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [June 14, 2024, 4:42pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/104 "2024-06-14T16:42:58Z")
Again, he isn’t getting that much cash. It’s stock options to be exercised in the future. If the stock price goes down, the value goes down. If the stock price craters, they become worthless. ---
**Author:** ![griffin1977](https://avatars.discourse-cdn.com/v4/letter/g/977dab/32.png) [@griffin1977](https://boards.straightdope.com/u/griffin1977)\ **Post date:** [June 14, 2024, 4:47pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/105 "2024-06-14T16:47:39Z")
> [@hajario](#): > > Again, he isn’t getting that much cash. It’s stock options to be exercised in the future. If the stock price goes down, the value goes down. If the stock price craters, they become worthless And again is still 55bn Tesla could otherwise use to build factories or design autopilots that don’t kill as many people, just as much as if he’d walked out with 55bn in cash. That’s how shares work, companies sell shares as individuals don’t have the cash and can’t take the risk, so they sell shares so they have the money to build factories or design autopilots that don’t kill as many people. ---
**Author:** ![Atamasama](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/atamasama/32/12961_2.png) [@Atamasama](https://boards.straightdope.com/u/Atamasama)\ **Post date:** [June 14, 2024, 5:07pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/106 "2024-06-14T17:07:19Z")
> [@bump](#): > > I feel like it’s a big gamble; laws and regulations haven’t caught up to the idea of self-driving cars, and the first mover in that space is going to pave the way through being named in lawsuits when people get hurt or killed. You’d have thought that Apple, given their track record of innovation and ability to successfully pioneer new technologies in a profitable way, that they might have been the first ones to succeed with a portable pocket computer. And they certainly tried with the Newton. But it was a failure because they tried too early, both the technology and the public weren’t ready yet. Palm ended up being the successful pioneer and Apple never had another PDA. Instead they released the iPhone which led to smartphones essentially killing the PDA paradigm. Like Apple with the Newton, Tesla might fail hard in trying to be the first with self-driving cars. No matter their popularity or track record. You can never be sure. So it’s definitely a gamble. ---
**Author:** ![Tamerlane](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tamerlane/32/7602_2.png) [@Tamerlane](https://boards.straightdope.com/u/Tamerlane)\ **Post date:** [June 14, 2024, 5:07pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/107 "2024-06-14T17:07:59Z")
> [@Great\_Antibob](#): > > There’s a legitimate argument about if such huge potentially uncapped compensation packages are good for investors or for society, but that’s a separate debate. At the end of the day that’s really all this debate is about. It’s just another in a long line of “the CEO got what!” bitching. Just a more extreme example than usual. Musk is a particularly polarizing figure and the amount is particularly huge so it drives controversy. But he’s far from the first and won’t be the last to get verbal tomatoes thrown at him based on perceptions of massive greed. The dirty socialist in me agrees there should be a cap for society’s sake - I’d sacrifice unfettered innovation at the altar of no unfettered gains and no billionaire’s club. But that’s just me, American society probably disagrees even if put to a democratic vote and it is a hijack of this specific thread. But that’s basically what this argument boils down to. ---
**Author:** ![griffin1977](https://avatars.discourse-cdn.com/v4/letter/g/977dab/32.png) [@griffin1977](https://boards.straightdope.com/u/griffin1977)\ **Post date:** [June 14, 2024, 6:07pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/108 "2024-06-14T18:07:25Z")
> [@Tamerlane](#): > > It’s just another in a long line of “the CEO got what!” bitching. Just a more extreme example than usual I’d say the sheer amount of this, relative to the company’s profitability, combined with the circumstances (namely the lack of performance of Tesla, the obvious incompetence of Musk and the clear implication that this is just Musk clawing back the money he lost on Twitter) make this a whole different level of clusterfuckery. I might personally disagree with some of the CEO payouts you see regularly, but you can make the argument that it’s just fair compensation relative to the profits they made for their shareholder. But there is absolutely no way you can claim that here. This is a heist. ---
**Author:** ![Great\_Antibob](https://avatars.discourse-cdn.com/v4/letter/g/e47c2d/32.png) [@Great\_Antibob](https://boards.straightdope.com/u/Great_Antibob)\ **Post date:** [June 14, 2024, 6:10pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/109 "2024-06-14T18:10:42Z")
> [@Tamerlane](#): > > But that’s basically what this argument boils down to. Yeah, I’d prefer something a little more seemly than what he got too. But at the end of the day, this thread boils down to: INCREDULITY! BIG NUMBERS BAD! ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [June 14, 2024, 7:00pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/110 "2024-06-14T19:00:15Z")
> [@griffin1977](#): > > This is a heist. The victims voted overwhelmingly to give their money to the thief. ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [June 14, 2024, 7:07pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/111 "2024-06-14T19:07:27Z")
> [@andrewm](#): > > Even after yesterday’s move, TSLA’s price is still lower than it has been (with brief exceptions) in 44 months. I’m just talking about the part directly related to the outcome of the vote. It was up a couple of percent yesterday; it seems to be down a couple of percent today. Not a huge deal either way, but if anyone was unhappy about the result they had an opportunity to leave. And of course anyone that invested in 2018 is still up ~8x. ---
**Author:** ![griffin1977](https://avatars.discourse-cdn.com/v4/letter/g/977dab/32.png) [@griffin1977](https://boards.straightdope.com/u/griffin1977)\ **Post date:** [June 14, 2024, 7:10pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/112 "2024-06-14T19:10:02Z")
> [@Cheesesteak](#): > > victims voted overwhelmingly to give their money to the thief Something they have in common with the victims of plenty of other cons and scams. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [June 14, 2024, 7:12pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/113 "2024-06-14T19:12:12Z")
> [@Dr.Strangelove](#): > > Well, one problem is that you will never be able to buy a Waymo. It will only ever be a robotaxi. FTR, Waymo unsurprisingly has partnerships with a number of auto manufacturers. If their system is the most robust and there’s a significant difference with Tesla’s, then there will be no prizes for 2nd place. OTOH, if making this software is easy after the development stage, then Tesla will have no special advantage or way of making supernormal profits. Which is what Tesla’s inflated PE relies on. (Yeah, yeah, Tesla has data. So does google.) > [@](#): > > Tesla has about $3.5 billion in deferred revenue from FSD sales. Divide that by 10 and call that annual profit moving forwards. Net income for TSLA was about $15 billion last year. So that works out to a ~2.3% earnings underestimate. That doesn’t justify a 4x overvaluation of Tesla relative to GM and a 2x overvaluation relative to the SP500. All numbers are rough. I hope I haven’t made an order of magnitude error. [Financials are here](https://finance.yahoo.com/quote/TSLA/financials/). That said, Tesla is down 30% from a year ago: TSLA’s valuations have been crazier in the past. > [@Tamerlane](#): > > The dirty socialist in me agrees there should be a cap for society’s sake - I’d sacrifice unfettered innovation at the altar of no unfettered gains and no billionaire’s club. But that’s just me, American society probably disagrees even if put to a democratic vote and it is a hijack of this specific thread. But that’s basically what this argument boils down to. Capitalist theorist (aka economist) Brad DeLong argues that eye-popping pay packages like this encourage a CEO focus on meme-stock antics rather than the underlying value of the company. Which isn’t good for capitalism either. Such incentive is reflected in Musk’s current behavior. Musk was paid in stock options. If he was paid 67 Mablinglillian in cold hard cash or if options were tied to more direct performance metrics, that would be different. But they aren’t so it isn’t. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [June 14, 2024, 7:44pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/114 "2024-06-14T19:44:17Z")
> [@griffin1977](#): > > 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. Several years ago, Elon personally contributed to my decision to never buy a Tesla and to request my deposit back for a Model Y that I was planning to buy. His insane antics convinced me that it was not a good decision to purchase a vehicle from someone who could do crazy shit to the company on a whim. I believe this past decision of mine was a sound one. ---
**Author:** ![griffin1977](https://avatars.discourse-cdn.com/v4/letter/g/977dab/32.png) [@griffin1977](https://boards.straightdope.com/u/griffin1977)\ **Post date:** [June 14, 2024, 7:45pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/115 "2024-06-14T19:45:49Z")
> [@Euphonious\_Polemic](#): > > I believe this past decision of mine was a sound one Again the only part of this i’d disagree with with is the “I believe” ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [June 14, 2024, 7:54pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/116 "2024-06-14T19:54:32Z")
This is rich. Eyepopping $45 billion+ options package transferred to drug addled CEO as a reward for past performance. Meanwhile TSLA is a growth stock that doesn’t pay a dividend. Because they are company that has all sorts of internal projects that will pay a higher rate of return. Like R&D which was $4 billion last year and $3 billion the year before that. And options packages ten times that to incentivize distracted CEOs. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [June 14, 2024, 7:54pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/117 "2024-06-14T19:54:44Z")
FWIW, Apple’s rarely _first_ with much of anything. What they’re good at is being a bit later than state of the art, but slicking it up with sexy design and making it pretty solid. I suppose they learned their Newton lesson well. If I’m remembering my business school classes right, the second mover into a market/line of business is the one that’s usually most successful, as they benefit from the mistakes of the first mover, and are still early enough to define the category and build a significant market share before lots of competition shows up. But I feel like Tesla’s as much fleeing having to compete on a level playing field with the Toyotas and GMs of the world, as they’re trying to be a first-mover in SDVs. ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [June 14, 2024, 7:56pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/118 "2024-06-14T19:56:21Z")
> [@griffin1977](#): > > And again is still 55bn Tesla could otherwise use It’s not. _Every_ company is always sitting on an infinite reserve of unissued stock, subject only to board/shareholder approval. This virtual stock has no effect on the stock price because it hasn’t been sold. As long as Musk doesn’t sell his grant, it’s in basically the same position. He won’t be able to sell at all for some years, but even once he can he’s not likely to. He’s made the point several times that he cares more about control than the money. Well, maybe you don’t believe his claims about money. But it’s inarguable that he wants iron control over all of his companies. Having \>20% of voting rights for Tesla gives him immense power, which he would lose if he sold. There is a minor exception here, which is that Musk will likely borrow money against his shares. That implies some non-zero risk that he’ll have to sell shares eventually to pay off the loan (say, because some business venture went bust). So some of the shares could be sold eventually, but I expect that to be put off as long as possible. And it doesn’t apply to the whole amount, because it’s just a risk rather than certainty. Tesla can just issue another $50B in stock if they wanted. Converting that to actual dollars (i.e, to pay suppliers) _would_ have an effect on the stock price, though not necessarily negative if it was felt that they were investing it in something with a lot of potential. ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [June 14, 2024, 8:03pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/119 "2024-06-14T20:03:29Z")
> [@Measure\_for\_Measure](#): > > FTR, Waymo unsurprisingly has partnerships with a number of auto manufacturers. This is what the Waymo sensor suite looks like: [![](https://duet-cdn.vox-cdn.com/thumbor/0x0:5154x3372/640x427/filters:focal(2717x1815:2718x1816):format(webp)/cdn.vox-cdn.com/uploads/chorus_asset/file/24211424/1390904981.jpg) ](https://duet-cdn.vox-cdn.com/thumbor/0x0:5154x3372/640x427/filters:focal(2717x1815:2718x1816):format(webp)/cdn.vox-cdn.com/uploads/chorus_asset/file/24211424/1390904981.jpg) Not only does that stuff cost a couple hundred grand, absolutely no manufacturer is going to sell a car that looks like that. (Missing from the image is that there are several bits on that car that are _constantly spinning_. It’s incredibly distracting.). Unless Waymo shows that they can drive with just cameras and _maybe_ a few integrated LIDAR units, I have no confidence that their tech will ever end up in a normal car. > [@Measure\_for\_Measure](#): > > if options were tied to more direct performance metrics Like what? The package _was_ tied to revenue and EBITDA. And extremely high targets compared to where they were at at the time. What more do you want? ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [June 14, 2024, 8:10pm UTC](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838/120 "2024-06-14T20:10:20Z")
> [@Measure\_for\_Measure](#): > > This is rich. Eyepopping $45 billion+ options package transferred to drug addled CEO as a reward for past performance. It was a reward for future performance in 2018. The metrics were easily met and the investors who had stock then have cleaned up. Some dude with a small handful of shares got a lawyer to sue and it was taken away. The owners of the company voted to re-issue it. [Previous page](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838.md?page=5) [Next page](https://boards.straightdope.com/t/i-pit-elmo-and-his-tesla-heist/1002838.md?page=7)