E-lated E-lon

Last night, Tesla voted a $50 billion (with a b) compensation package to Elon Musk. E-lon was e-lated. Previously, Elon had struggled on about $1.5 billion. When Tesla’s Board of Directors originally gave him $54 billion last year, some shareholders sued. Earlier this year, a judge tossed out Elon’s package calling it an “unfathomable sum” and noting that it represented a 3,000% pay increase while Tesla was losing money. If shareholders approve Elon’s package though, he gets it anyway, lawsuits and judgments be damned.

Why would a Board of Directors approve an obscene executive compensation package in the first place? It’s the Capitalist Way. “You scratch my back. I’ll scratch yours.”

Air Products gave its loyal employees shares of stock back in the day. As such, we had a vote to elect Directors. The agenda for the Annual Shareholders Meeting included nominees for Director, their qualifications, other Boards on which they served, and how many shares of Air Products stock they held. Air Products executives served on the Boards of DuPont, Eastman, and other chemical giants. Their executives served on ours. If Dexter Baker wanted a $12 million salary and 750,000 shares of Air Products stock (all of which he had in the mid-80s), how could he refuse the same compensation to his counterpart at DuPont?

By the way, $12 million and 750,000 shares of stock that goes for about $230 per share is impressive in 2024. It was really impressive in 1985 when the dollar bought twice as much as it does today.

Elon cleverly stacked his Board with sycophants and, in a master move, his divorce lawyer. The more Elon makes, the more the former Mrs Elon gets, and the bigger the cut for that Legal Eagle. Of course, Elon’s Board will give him whatever he wants.

Should Republicans win the White House (shudder) and Congress this year, all those “campaign contributions” will pay off in another massive tax cut for corporations. If Tesla can afford to hand Elon $50 billion, do they really need a tax cut?

By Ed Dufton