A Thrash Metal Drummer Cost Elon Musk $56 Billion This Week By Proving Elon To Be A Greedy Scumbag
A thrash metal drummer by the name of Richard Tornetta has stuck a major blow against billionaire Elon Musk. The musician, who previously played in Dawn Of Correction, filed suit against Musk back in 2018, seeking to halt Musk‘s company Tesla from awarding him a $56 billion compensation package.
Tornetta took issue with the package, claiming that the Tesla board had breached their fiduciary duties in awarding Musk the unprecedented compensation package, which was was performance-based. Tornetta, who holds just 9 shares in Tesla, argued that Musk “controlled Tesla” claiming that the board acted without independence in approving the package.
According to CNBC the Delaware Supreme Court sided with Tornetta on the matter earlier this week, ruling that Musk had “extensive ties” and influence over several individuals who had negotiated the compensation package.
Musk commented briefly on the matter:
Never incorporate your company in the state of Delaware
— Elon Musk (@elonmusk) January 30, 2024
He later hinted at potentially moving Tesla‘s state of incorporation to Texas. Greg Varallo, who represented Tornetta in the case, said in a statement:
“We are enormously grateful for the Court’s thorough and extraordinarily well-reasoned decision in turning back the Tesla board’s absurdly outsized pay package for Musk. The Court’s hard work will redound directly to the benefit of Tesla investors, who will see the dilution from this gargantuan pay package erased.”
Musk says Tesla will hold shareholder vote ‘immediately’ to move company’s incorporation to Texas
By Tesla CEO Elon Musk on Thursday said the electric vehicle maker will hold a shareholder vote to transfer the company’s state of incorporation to Texas, after publicly lashing out at Delaware—where the company is currently incorporated—over a court decision that voided the billionaire’s massive $50.9 billion pay package.
Key Takeaways
- In a post on X, Musk said Tesla would “move immediately” to conduct the vote, but did not give an exact date.
- Musk cited a poll on his X account, as the rationale behind the decision was that the “public vote” was “unequivocally in favor of Texas.”
- The unscientific poll asking Musk’s followers if the company should change its state of incorporation to Texas received over 1.1 million votes, with 87% voting “Yes.”
Key Background
Earlier this week, a Delaware judge voided Musk’s record $50.9 billion pay package from Tesla in a case brought by a shareholder. The plaintiff argued the massive pay package was unfair to shareholders and the company’s board had failed in its fiduciary duty by approving it. In her ruling, Delaware judge Kathaleen McCormick pointed to Musk’s close ties with the board of directors, which was “tasked with negotiating” the pay package on behalf of Tesla.
The ruling means Tesla’s board will have to come up with a new compensation plan for Musk, unless the company chooses to appeal. Musk reacted by lashing out at the state of Delaware, tweeting: “Never incorporate your company in the state of Delaware.” Companies usually pick Delaware as a state of incorporation, despite operating elsewhere due to its tax benefits and corporate-friendly laws.
Related
Tangent
This isn’t the first time Musk has relied on an X poll to make an important business decision. After acquiring X, formerly known as Twitter, the billionaire has repeatedly turned to unscientific polls on the platform to make key policy decisions. In late 2022, the billionaire restored former President Donald Trump’s account on X after a poll. Later that year, Musk used another poll to ask followers if he should step down as the social media company’s CEO, which resulted in a majority voting in favor. While Musk presents them as a democratization of important decisions, X’s unscientific polls are vulnerable to brigading or manipulation by bots or fake accounts. The billionaire himself has alluded to these problems when the results of these votes don’t favor him.
Forbes Valuation
According to our estimates, Musk’s current net worth is $182.6 billion, making him the world’s second richest person on the Forbes Real Time Billionaires list. The billionaire ceded the title of the world’s richest to LVMH CEO Bernard Arnault on Wednesday, after the Delaware ruling.
This article was first published on forbes.com and all figures are in USD.
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