Elon Musk, chief government officer of Tesla Inc., throughout a hearth dialogue on synthetic intelligence dangers with Rishi Sunak, UK prime minister, not pictured, in London, UK, on Thursday, Nov. 2, 2023.
Tolga Akmen | Bloomberg | Getty Images
The bombshell, 200-page Delaware court ruling Tuesday ordering Tesla to undo its huge $56 billion compensation package for CEO Elon Musk options descriptions of a lawyer holding again tears, a reference to “Frankenstein” and a cringey self-driving car pun.
And then there’s a entire part about Mars — the planet — and Musk’s perception that he has “a ethical obligation” to make use of his unbelievable wealth to assist colonize it to assist “save humanity.”
That wealth is on observe, barring a profitable enchantment, to be considerably diminished by a ruling issued by Chancery Court Chancellor Kathaleen McCormick.
Musk wasn’t completely happy about that Tuesday, tweeting, “Never incorporate your organization within the state of Delaware.”
But McCormick appeared to have some enjoyable writing her determination.
Here are the highlights of McCormick’s ruling:
- “Was the richest individual on the planet overpaid? The stockholder plaintiff on this spinoff lawsuit says so. He claims that Tesla, Inc.’s administrators breached their fiduciary duties by awarding Elon Musk a performance-based equity-compensation Plan.”
- “In the ultimate evaluation, Musk launched a self-driving course of, recalibrating the velocity and route alongside the best way as he noticed match. The course of arrived at an unfair worth. And by means of this litigation, the plaintiff requests a recall.”
- “Musk is motivated by bold objectives, the loftiest of which is to save lots of humanity. Musk fears that synthetic intelligence may both cut back humanity to ‘the equal of a home cat’ or wipe out the human race fully. Musk views area colonization as a means to save lots of humanity from this existential menace. Musk seeks to make life ‘multiplanetary’ by colonizing Mars. Reasonable minds can debate the virtues and penalties of longtermist beliefs like these held by Musk, however they aren’t on trial. What is related right here is that Musk genuinely holds these beliefs.”
- “Colonizing Mars is an costly endeavor. Musk believes he has a ethical obligation to direct his wealth towards that purpose, and Musk views his compensation from Tesla as a means of bankrolling that mission. Musk sees working at Tesla as worthy of his time provided that that work generates ‘extra financial sources . . . that would . . . be utilized to creating life multi-planetary.'”
- “Tesla and Musk are intertwined, virtually in a Mary Shelley (‘You are my creator . . .’) type of means. As Kimbal defined, ‘Tesla created Elon Musk’s persona and Elon Musk’s persona is hooked up to Tesla.’ Musk is Tesla’s public face, and he describes Tesla as ‘my firm.’ (footnote: See typically Mary Shelley, Frankenstein; or, The Modern Prometheus (Lackington, Hughes, Harding, Mavor & Jones, 1st ed. 1818)”
- “In addition to his 21.9% fairness stake, Musk was the paradigmatic ‘Superstar CEO,’ who held some of essentially the most influential company positions (CEO, Chair, and founder), loved thick ties with the administrators tasked with negotiating on behalf of Tesla, and dominated the method that led to board approval of his compensation plan. At least as to this transaction, Musk managed Tesla.”
- “Musk dictated the timing of the method, making last-minute modifications to the timeline or altering substantive phrases instantly prior to 6 out of the ten board or compensation committee conferences throughout which the plan was mentioned.”
- “The defendants maintained that the plan is an distinctive deal when in comparison with non-public fairness compensation plans, however they didn’t clarify why anybody would examine a public firm’s compensation plan with a private-equity compensation plan.”
- “The references [from a prior Delaware court ruling] to ‘supine servants’ and ‘an overweening grasp’ is hyperbolic, and little doubt intentionally so to provide emphasis to the problem of the usual. But it hits dwelling right here. There isn’t any larger proof of Musk’s standing as a transaction-specific controller than the Board’s posture towards Musk in the course of the course of that led to the Grant. Put merely, neither the Compensation Committee nor the Board acted in one of the best pursuits of the Company when negotiating Musk’s compensation plan. In reality, there may be barely any proof of negotiations in any respect.”
- Todd “Maron was completely beholden to Musk, lending credibility to the accuracy of the draft proxy assertion. But his relationship with Musk raises considerations as to different elements of the method throughout which Maron suggested the Board and Compensation Committee. Maron joined Tesla as Deputy General Counsel in September 2013, and was promoted to General Counsel in September 2014, reporting on to Musk. Before becoming a member of Tesla, Maron was Musk’s divorce legal professional.”
- “Maron neither socialized with Musk nor thought-about himself a buddy of Musk when he labored at Tesla, however he owed his profession to and had real affection for Musk. Both in his deposition and at trial, Maron held again tears when requested about his departure from Tesla in January 2019, describing it as ‘essentially the most tough determination’ he had made thus far.”
- “Defendants additionally argue that Musk wanted extra incentives to remain on at Tesla or he would spend extra time at SpaceX, the place he may fulfill his galactic ambitions to determine interplanetary journey, colonize Mars, and doubtlessly earn more cash within the meantime. That argument begs one other query: if encouraging Musk to prioritize Tesla over his different ventures was so vital, why not place guardrails on how a lot time or power Musk needed to put into Tesla?”