By Berl Falbaum
If it is true that “greed is good” as Michael Douglas’ character Gordon Gekko told us in the movie, “Wall Street,” then Elon Musk -- you know, that Elon Musk whose personal assets are equal or exceed the GDP of some 150 countries -- is not only the richest man in the world, but the best person who ever lived.
Musk certainly is good, indeed, very good, if greed is the measurement.
Musk is involved in a lawsuit against Tesla Inc., the electric car company he heads, that claims a financial package awarded Musk by Tesla’s board is unfair.
The compensation plan, involving stock options, deserves a sentence by itself: He would receive $50 billion if the company achieves certain financial objectives.
When I first read “$50 billion” I thought it was a typo. I checked, discovered the number was accurate and chuckled. Then I cried realizing how much I screwed up when I asked for raises during my career.
I am not totally unsympathetic. Maybe the richest man in the world is strapped for cash. Maybe there is something left he can’t buy. I don’t mean to be hard-hearted. I feel a little guilty being a little skeptical.
But I did wonder what one can buy with $50 billion. According to a Google search, you can buy: 6.5 billion Big Mac combos; 10 nuclear reactors; 33 Yankee Stadiums; 71 Mona Lisas; 5,000 private islands in the Caribbean; or 125 Boeing 747s.
Given that Musk is estimated to be worth about $200 billion, even if he made any of these purchases, he would have a “little” left over. He would not have to dip into his “rainy day” fund.
The plaintiffs charge in the suit that the package was developed by Musk’s friends on Tesla’s board; that they did whatever he wanted.
My mother always warned me that I was hanging around with the wrong crowd.
The attorney for the plaintiffs, Richard Tornetta, charged that the pay package was “beyond the bounds of reasonable judgment.” Of course, “reasonable” is subject to interpretation. What is reasonable to one person might be over the top to another. Maybe $50 billion is right on the dividing line of reasonable.
I guess Tornetta also failed to surround himself with the right friends. He and I need to talk.
I bet you have absolutely no idea what Musk’s attorneys said.
OK, I’ll help. They said that the pay package was totally justified. Surprise!
At a contingency attorney fee of, let’s say, 33 percent, which is about average for contingency cases, the take --- and “take” is the right word here --- would be $16.5 billion. And that’s without having any connections to a friendly board.
Musk’s lawyers argued that, “The Plan designed and approved by the Board was not a typical pay package intended to compensate the ordinary executive…because Musk is not the typical CEO.”
For $16.5 billion, you can say that again ... and again ... and again.
Musk defended the package from the witness stand, telling the court: “The pain no amount of words can express,” how he suffered in making Tesla profitable. “It’s pain I would not wish to inflict upon anyone.”
Maybe he could wish the pain-killer -- $50 billion -- on me. While enduring immense, excruciating, unbearable pain, Musk already earned $52.4 billion from stock options over 4 ½ years. I guess that prescription wasn’t strong enough to stop the suffering. (He might ask his employees about pain).
I wonder if Musk wins in court whether the proposal requires the approval of shareholders. If it did, I certainly would vote “no.”
I own very little stock -- 20-30 shares -- in five companies for the fun of it. I always -- always -- voted “no” on any management proposal.
If I add up all the votes, the tally is about 36,984,332 management proxy votes yes to my 97 no. But as Donald Trump would say, the process is rigged.
So, if I had a chance to vote on the Musk package. I would oppose it unless, of course, he shares some pain-killers with me. (Full disclosure: Tesla is not part of my vast stock portfolio).
But if you are a budding business executive with the goal of becoming a high-ranking executive, keep an eye on the trial. The New York Times advises in its coverage of the court deliberations that the template used by the Musk board -- sorry, I mean Tesla board -- is being copied by other corporate boards.
Meanwhile, given this precedent, I plan to ask my editors for a raise. With arguments used by Musk’s attorneys, I will try to convince them that I am no ordinary columnist. I am also in great pain. I don’t want to reveal my strategy, but I am prepared to give a billion here and there.
Maybe Musk’s attorney would represent me. At the average contingency fee, they would reap about ... nay, they’ll never do it. Too embarrassing.
(Berl Falbaum is a veteran political journalist and author of 12 books.)
