New Orleans Once upon a time, some people used to wonder “how the other half lived.” In 2024, that’s a quaint notion. The common and business culture now has made it all about the fractional. We are forced to read about exploits, politics, purchases, personal affairs, and more of the super small fraction of mega-billionaires. Not the 1%, but the one-thousandth of 1% or less. So, small, we’re never sure if we have the decimal points right. In that tiny, tiny fraction we find Elon Musk, who is off and on, the richest person in the world, depending on whether he fritters away more billions here or there on vanity platforms like Twitter, now pretending to be X, as in X-rated, it seems. Finally, in a relief that could force a reordering of the famous Wall Street movie’s expression, “greed is good,” Musk may have overreached, and in so doing exposed the limits of both greed and hubris.
Many corporations, like Musk’s Tesla and others, register in Delaware, largely because these registrations are a huge part of the small state’s revenue stream, making them notorious for letting corporations get away with both highway robbery and everything short of murder. In a surprise, a chancery judge acted on a 2020 shareholder legal challenge over the grossness of Musk’s pay package by voiding the whole shebang. It was over a $50 billion payday holding that if he hit a bunch of softball targets, which of course he did, allowed him to buy stock at $23 bucks, when it was worth exponentially more. The board’s rationale was that setting targets and paying him a king’s ransom would force him to really and truly focus on building Tesla’s car businesses. Ha! No such luck, it gave him a bank account big enough for many X-affairs with Twitter, space, and a host of other attention-deficit schemes.
The judge was having none of that. She found that the board was in Musk’s pocket and that he effectively was setting his own compensation. She voided the whole package. Of course, Musk will appeal. Of course, he is whining that no one should incorporate in Delaware. Of course, no one knows how he will repay Tesla and the shareholders for his ill-gotten gains. Furthermore, observers believe this may send a message to other tech founders and greedy CEOs everywhere that there are ceilings to how much you can rip and run, if you treat a public company as your personal piggy bank. In the cheap seats, all we can say, is “Maybe, we’ll believe it, when we see it.”
There’s also irony next door to this Musk slap down. The ink is hardly dry on the reports that Musk also recently threatened the Tesla board that if he didn’t give him another bunch of $50 billion or so in stock to increase his ownership percentage in Tesla, then he would take his schemes, both profitable and harebrained, out of Tesla and launch them in other, no doubt personally controlled, corporate entities. At so many levels, this is absurd. After blowing his wad with the money-hemorrhaging Twitter, he wants to bully his way back to his former dominant holdings. At all levels, he has no care about how rapacious he appears in public.
Meanwhile, as the Simon Legree of our era, he is in court for discrimination with the EEOC. He is suing over the very existence of the National Labor Relations Board because he fired workers who had the gall to point out that the emperor has no clothes. He’s now peddling election falsehoods from 2020 on X-Twitter, as if that’s news. It goes on and on ad infinitum, ad nauseum.
We can’t shut him up it seems, but at least maybe little Delaware and his shareholders can stop him from cashing in on his crazy, and other members of the fractional rich might finally buy some clues that Musk seems unwilling to purchase.