"That's the case for many, if not most public companies."
But even if true what effect does that have on her arguments. She never claims having these relationships is unusual. She only states that the minority shareholders were not informed about them.
"Yet, it amounted to a huge gamble - multiplying the value of a 50B company by over 10x -, which in case of success the board agreed to reward with 6% of shares."
Her opinion emphasises that Musk indicated, repeatedly, he had no intention of ever leaving Tesla. What was the gamble. No matter what happens he still stays working there forever. Where is the leverage. Musk was even dumb enough to admit he was "negotiating against himself".
Try going to your boss, promising you will never, ever leave and then ask them for a raise.^1 Imagine the boss has no personal relationship with you and acts in the best interests of the company.
1. Just in case anyone becomes confused: I am not suggesting what Musk was "negotiating" was a "raise", I am simply using as a hypothetical a more common scenario amongst mere mortals where compensation is being negotiated and the threat of leaving can be used as leverage.
> Try going to your boss, promising you will never, ever leave and then ask them for a raise.
That was not a raise, it was a contingent payout. One could argue that kept him focused. Once done, he could scatter his attention to things like hostile takeovers and the meaning of free speech.
> At a high level, the “6% for $600 billion” argument has a lot of appeal. But
that appeal quickly fades when one remembers that Musk owned 21.9% of Tesla when
the board approved his compensation plan. This ownership stake gave him every
incentive to push Tesla to levels of transformative growth—Musk stood to gain over $10 billion for every $50 billion in market capitalization increase. Musk had no intention of leaving Tesla, and he made that clear at the outset of the process and throughout this litigation.
One could argue, as judge argued in the above excerpt, that his 21.9% ownership (before this compensation) of Tesla is what could keep him focused...
In the real life, his twitter antics happened while he believed the compensation scheme would be fulfilled. So real life kind of proves that the compensation scheme didn't provide the sort of focus spoken of here.
E: Hey Boss, I want you to know that I am committed to staying with this company for life, no matter what happens.
B: OK.
E: I would like some incentives, including more money and increased control over the direction of the company if I hit certain milestones.
B: And what if we say no?
E: Um, I guess I'll just keep on working toward the milestones.
Did Musk get suckered into working with more focus than he would have absent the compensation package. As long as he believed he would get it, it worked to keep him focused. Yeah, right. By his own statements he would have kept on working with focus even if he was not promised the compensation package. Either way, there is no need to give it to him. He is not going anywhere.
But even if true what effect does that have on her arguments. She never claims having these relationships is unusual. She only states that the minority shareholders were not informed about them.
"Yet, it amounted to a huge gamble - multiplying the value of a 50B company by over 10x -, which in case of success the board agreed to reward with 6% of shares."
Her opinion emphasises that Musk indicated, repeatedly, he had no intention of ever leaving Tesla. What was the gamble. No matter what happens he still stays working there forever. Where is the leverage. Musk was even dumb enough to admit he was "negotiating against himself".
Try going to your boss, promising you will never, ever leave and then ask them for a raise.^1 Imagine the boss has no personal relationship with you and acts in the best interests of the company.
1. Just in case anyone becomes confused: I am not suggesting what Musk was "negotiating" was a "raise", I am simply using as a hypothetical a more common scenario amongst mere mortals where compensation is being negotiated and the threat of leaving can be used as leverage.