[aw1621107]

> Did it have a material change on the outcome of the vote?

Potentially, yes. Stockholders did complain about the proposed grant even with their incomplete information; who knows what they might have said if the disclosure were more complete. From the opinion:

> The two largest proxy advisors, ISS and Glass Lewis, both recommended voting against the 2018 Grant.

> [Specific details about the objections from ISS/Glass Lewis]

> Stockholders also criticized the Grant, noting that Musk’s Tesla equity provided sufficient motivation for Musk to perform, the Grant’s size and dilutive effects were excessive, the EBITDA milestones were too low, and that linear milestones were inappropriate for an “exponential company” like Tesla.

If the stockholders knew that the directors were not independent and/or that there wasn't a substantial negotiation and/or that (some of?) the planned targets were not that ambitious, then they may reasonably say no to the grant.

> the board went alon[g] with it

The board was not independent. There were nine directors on the board, but one left early, so that leaves 8. Elon is one and his brother another. Antonio Gracias and James Murdoch have close personal ties to Elon, and the former is also very heavily invested in Elon's businesses. Ira Ehrenpreis also has a "weighty" relationship with Elon and is also invested in Elon and Kimball's business ventures other than Tesla, though not to the same extent as Gracias.

The first 3 (Kimball, Gracias, and Murdoch) were determined to lack independence from Musk due to their close personal relatioship - 4 out of 8, and that doesn't include Ehrenpreis' personal ties.

In addition, the judge found that the board didn't act independently either. Some of the members themselves testified that they were working together with Musk during the negotiations - hardly a sign of acting independently of their personal ties.

> and the shareholder approved

That was determined to be irrelevant due to Tesla making material omissions in the proxy statement before the vote.

> The fact that a judge can come in and completely reverse such a decision is mind blowing and seems more like a judicial activism.

That's the law. If you break the rules it's not unreasonable to be prevented from reaping the rewards of doing so.

[YeBanKo]

The plan targets not that ambitious? $60B to $650B to get the full package in how many years? If the committee was his mom and his brother %79 would have voted yes. One very small shareholder and a judge with bias overrule the majority of shareholder, trying to wrap it into a legal argument.

[aw1621107]

> The plan targets not that ambitious?

Some of them, at the very least. If you were projecting that you were going to meet some of the milestones before offering the compensation plan and tell your investors that you project that you have a >=70% chance of meeting some of the milestones a few months after offering the grant, then I think it's reasonable to claim that at least some of the milestones were not that ambitious.

Some of the shareholders made similar criticisms, even without knowing about the internal projections.

> One very small shareholder and a judge with bias overrule the majority of shareholder

The shareholder vote was not fully informed, so it counts for little in these types of matters. Shareholder size also doesn't matter - they're all equal under the eyes of the law. Might doesn't make right.

I'm also curious - why do you think the judge is biased?

[hackerlight]

It doesn't matter. You can't get your compensation package set by your friends in a public company and then say it was okay just because the company did well. Agents are supposed to represent the shareholders' interests.

[YeBanKo]

They did. Board approved, shareholders approved, the company hit the milestones.

[hackerlight]

> Board approved, shareholders approved

All covered in the judgement. Shareholders can't act in their best interests if they don't know that the advice they're getting is a product of conflict of interests instead of a genuine independent recommendation.

> the company hit the milestones.

Irrelevant since we don't know if the company would have hit those milestones regardless. The ruling covers this, in her judgement Elon had sufficient motivation with existing equity that the pay package was unnecessary from the interests of shareholders.

[ModernMech]

Musk lied to the shareholders to secure those votes. It doesn’t matter what they voted when fraud is involved. That’s why a judge gets to decide.

Enforcing the law is not “judicial activism”