Transcript
Whoa. Live. Yeah. Come on. Yeah, I'm with you from Theo ISS vending machine. Floor. They have a whole Florida vending machine. So I've just learned It weren't we didn't we do this live from glass Lewis's. Pickleball court pickleball courts are backgammon like game, the CFO of ISS. Just call me to say that one floor of their entire headquarters is only snacks. It's only snack machine vending machine. This is why the Republicans obvious, she is why they're mad too many snacks. I didn't read that they're briefing, is the ESG Industries. Only weakly woke up Podcast featuring BM man. Matt mascardi. Oh no, that's way worse than BS. And today's elbow super Gus. Call. July. 19th, 2023. maybe the biggest ESG headlines ever, I'm gonna say this is like I was nerding out yesterday. Matt last night on my couch, doing my headlines, are like 10 p.m. It was hot. I have no AC in this room. I was working in and I thought to myself these might be like, the biggest ESG headlines I've ever seen in my life. Yeah, not only that, they might be the biggest free flow analytics. Headlines. Ever released, we have an anti-woke update from Matt mascara. Do we do have an anti-cop update today? No, I just kind of have a board update is what I have and I was in. I'm gonna bore you with my board updates and we do have a word from our sponsor. Our show today is being sponsored by Sk8 your ESG Data Solutions. Provider, Paul's driving down today. Yeah, he'll be stopping in later in the show to talk about director compensation. Yeah, into into the free flow Portland Studio. Yes, absolutely. Yeah. So great shows all over life. Oh, bye. Free, float, analytic. Oh yeah. Thanks for having analytics. Sure. I don't forget. Free floating analytics.com, get your free data. Partial part of that is SK data. Amazing skate data, more importantly, go there for the the beautiful graphics. yeah, I love, I love looking in the eyes of the directors that run my companies because even if you don't, if you're not like attached to our data, There's a nice purples, a nice. This is nice day that this nice colors on the website. I mean, first of all, why aren't you attached to our diet but what do we got? We got a big show today, let's do it. It's well Wednesday which most things are not that woke anymore. I mean these top three headlines potentially other just the biggest headlines we've ever seen and this for this show in no particular order first, the Tesla board. To return 735 million dollars in stock awards to end lawsuit over PayPal packages. That's a lot of pay incredible. This is an incredible. I I had to read this like six times. Like, is this part? This is a settlement agreement. So, it's over. It's done, right? It's not gonna be an appeal. Well, I'll get to it a little. You will probably good reasons why they settled. Okay. Well, okay, this was a case brought to by the Detroit police and fire retirement fund, okay? Good for them. And they they played that by paying the board directors, unfair, and excessive compensation. The board deprived shareholders of significant sums of money of course, right? Right. Um let's just be clear. Yeah, before we go any further, You said, directors, this is not about Elon musk's. CEO pay know that died that case that's another case. There's still happening. This is just direct your pay. Director, pay. This lawsuit accused musk of stacking, the board with friends and family. and, That he wanted. Wow. We're shocked. I can't believe it and avoiding independent oversight. Actually, I love, I love the way they say this. They say this, barely we've ever said it, he accused musk of stacking the board to ensure outcomes. He wanted to avoid independent oversight. That's what you're doing, right? That's it. It's not just giving your friends jobs. Well, that's a part of it or your brother, but you're basically just ensuring that you get your way. Yeah. Well, yeah, that's what you're doing. You made your boss. the people that you like and who like, you Uh as a also, as a shout out against the horrible say, on pay system in the US where it's non-binding, vote, they reminded in the lawsuit, they reminded the court that a majority of independent Tesla shareholders rejected changes to direct your pay in 2014 and 2019. So the they actually share was actually a voice in this but they didn't. Listen anyway, so this group of director defendants, it's a long list and include includes Elon these part of it. Include elon's brother, Kimball, they are gonna have to give back three point one million stock options, value that roughly 700 million dollars. Can I say here too? One of the things that you just said is non-binding. So we just booked How house representative Sean Caston from Illinois? Who's on the house finance committee. He's forced to go to all these stupid hearings and one of the things that he did, we booked him, we didn't arrest him. What do you mean? We booked him know? I mean, he's coming on the show. He's coming on this show next week, we're maybe after that, we'll arrest him. Well, he doesn't know that we haven't decided, but he had a back and forth with the people testifying in which he asked a very simple question that. Nell minnow the the Godmother of governance. Yeah. Said the answer to he asked are these boats binding? That does anybody have to listen to your advice ISS? The answer was, no are the votes binding after you give the advice. The answer is no. And then he was like what are we doing here? Why are we why are we wasting our time with this? Because it's true. It only becomes binding when it's illegal settlement because no one, they don't have to listen, otherwise one part of the settlement agreement and it what it doesn't answer though is what you're just asking, is this will this be binding? The inference here is yes but one part of the settlement agreement is that Tesla shell submit their proposed annual pay to these non employed directors to an approval vote of the majority of unaffiliated. Tesla stockholders every every year, which basically means that people like Elon don't have won't have a say in it, but it doesn't say whether this will be binding, but this is highly unusual. corporate governance practice that you're now going to have to ask the non-connected shareholders, whether they approve of specifically directed pay. This is The same. Courts have forced a nanny on Elon Musk. Yes. The first time being this board was forced to create a committee called the disclosure committee. Yes. That reviewed his tweets and they stripped and they stripped his chair role and they stripped his chair role at some point. Do we say there aren't enough nannies? Maybe the guy shouldn't have 700 jobs? Simultaneously. I mean, how many nannies is too many nannies? Well, I'm glad you talked about this because what they would lawsuit doesn't cover because they're not yet subscribers to our data is that despite all this Despite the fact that Elon Musk does not control the company by by Cher voting power and despite the fact that there's a one share, one vote system, Elon still controls 72% of the influence of the border Corona, and his brother controls 8% of the influence. So While it's good, they have to give back this. These options, it doesn't really solve the initial problem, right? We haven't solved his oversized influence over. What should be an independent board which I suppose answers the question. How many nannies is too many nannies? We actually have zero real nannies because nobody has influence over musk musk. Still controls at. All right? Yeah. So what I would have liked to see here is for this and I don't know the negotiation of this settlement. So it's, it's possible that they did ask for certain governance changes, that didn't go through, what I would have liked to see here as maybe an important precedent to Us corporate governance, is to suggest the very easy solution to boot Elon Musk from the Tesla board because it's not like you, it's not like you're gonna, you're not gonna limit his power and control at the company. But what you are going to ensure is that there will be an independent Oversight board in place, right? So I I wonder if they did suggest this but that that's the only remedy here is to get these us CEOs off their boards. It's ridiculous. You don't need to be on their boards, they don't need to be on their boards. I don't know why it is a precedent and it's a relatively Global precedent that the boss of the company sits in the room with their bosses and makes decisions. Oftentimes why that? And oftentimes they are the they leave that body. They're the chair of that body. Not only are they in the room but they but they set the agenda for the discussion. Can you imagine when you were like, oh analyst I wish when your bosses are discussing your payroll discussing the. If you were like, why don't you come in? We're gonna talk with you about you. Yeah. Like it doesn't happen. It doesn't happen. You just got you, basically, you got a note on your Dust that said, you're fired. That was it? So this is free flow way of saying, let's start to get CEOs off of us boards. Let's start like all this. I like your ideas. I know like to subscribe to your newsletter. Is it available at least one Fortune to 500 CEO should volunteer and just reach out to us? We can do a, we can do a press release, like through our show. Maybe you're gonna step down, you're gonna be a corporate governance. Pioneer Neil minnow will be your new best friend. We can make that happen. We're we'll just go. Yeah, it doesn't even have to happen to all of them because we can use our data to just show the ones that should step down. The ones with the outside influence. Our data will tell you. And maybe, okay, next story, ready? Okay. I'm ready. Yeah, maybe even bigger news, maybe this is even bigger. You news. For our, I'm just excited to get the next story because again, I haven't seen such big juicy ESG headlines like this in a while Black Rock names, Saudi, aramco, CEO. I mean, Nasser to its board Again, I couldn't. Bull. I was just like, my, my jaw was on the floor. So after all this pushback against Larry Fink, for being way too woke, and there's too much ESG, he has taken the, the ultimate step, he's appointed the CEO of Saudi aramco, to the board of black. I mean, what? I'm again on speechless speechless what? Let's come back to this. Yeah. Oh, because well, I'll just say this. Yeah, there's a lot of Kabuki theater with this Choice. Yeah, I mean, this is Larry Fink basically saying, oh yeah, Republicans, you you think you're the only one who could do Kabuki theater. Welcome to corporate Kabuki theater in which we put whoever we want on our boards and make it look like we're super oil friendly or not, or we, Signals something that does or does not matter. Because the reality is 50% of the board influence is controlled by three people on the BlackRock board. Those people are Larry Fink founder of BlackRock, Susan Wagner founder of BlackRock and Rob kapito CEO of BlackRock like that future CEO. I'm glad you pointed that out because what's lost in the discussion is that is that there's supposed to be an independent board. It's supposed to be a board that represents first shareholders, maybe stakeholders, don't forget, Larry Fink was the one introduced the idea of stakeholder capitalism. So it's not a crazy thought. Apparently it's maybe somebody crazy but notice that it's BlackRock who is naming the CEO, the CEO of Saudi aramco to the board, right? It's not this, it's not an independent nomination committee. It's Larry Fink. It's the founder Larry. Yeah, it's Larry is the CEO and chair of that board and one of its Founders. And yeah, it's again you know, you want to know who the largest holder of Saudi aramco's, IPO. They're debt IPO and their idea. Yes, I want to know it's Black Rock. Okay. Let's not forget to Larry Fink is probably in the succession planning phase of his career. Anyway like like he a lot of reports done computer I think is it? So is that is this a succession statement? Is this like is he trying to say something here? I know you don't want to go too deep onto this yet. We'll be talking about this for many, but I, but I will make this prediction. Yeah. Okay, that's my prediction alert sound effect. Okay, it's a giant gong. Larry Fink steps down as CEO of BlackRock into the Bob, Iger role of executive chairs. of course, obviously, Rob kapito is at the The Bob, chapek the boomerang holder. He'll be he'll be shining the boomerang. Susan, Wagner, and Larry Fink still sit on the board as co-founders once executive chair once just a co-founder and capito. It's one screw up away from the entire board, just bringing back Larry Fink. I predict that before 2030 Larry Fink boomerangs back as the CEO of BlackRock and he hasn't even step down yet that's my prediction. Is this before, one more thing before we get off of Black Rock, is this a victory for the anti issue crowd? Is this a direct? Is this a direct? A direct result of their shareholder activism that they are against in the first place? Because this really is old-fashioned shareholder activism, right? Like you, you ran all the cage for a bit and maybe you get some kind of concession, is that what this is? No, not with. This is not even and I'll tell you why not even close. Tell me. I'll tell you why later and I said, oh, I didn't know your teasing your segment. I yeah, I'm not aware of anything. All right. Uh, moving on another big, although those two, those two are the biggest, I mean it's hard to top that one but another big one in our world. Is that Vivek Rama? Swami's investment firm which we've talked about a lot called strive Asset Management. They position themselves as the anti-woke anti-esg investment firm to try and take. I said it explicitly trying to take the politics out of investing Pro. Excellent Pro. Excellent. You know, CEOs roles not to talk about people or feelings or politics or anything. They are in the news today because the investment firm dials back. Its anti-walk Right rhetoric day and they sent a letter to investors. And acknowledge that they are seeing. As more political over-investment oriented turning off investors and limiting its opportunities to grow. So there you go. You know who the thought? That somebody would not want to invest in a company that says, oh all those other companies have a lot of data. Well, we want to use less data to invest and only focus on a select bit of data and exclude all other data. And actually, we're not going to invest. We're actually just gonna lease an index from somebody else and vote. So the only thing they do is vote for or against directors or shareholder, proposals their principles are to vote against wasn't his first vivek's first principle again against anywhere. There's a racial Equity audit. Yeah, diversity. Yeah. If you actually think about what a racial Equity audit is, it's a report that offers transparency about the people at the company, right? That's what it does it. Am I confused about what an audit is. It's a report, right? Yeah. So their founding principal was, we want less disclosure data, less knowledge for you to make a investment decision. We are happy to vote against more women than everybody else, who are on boards. And they somehow are seen as political and nobody wants to invest in that. I can't believe it. I was just watching a video posted on LinkedIn by its head of corporate governance. Justin danaher. I think his name is and yeah, Dan Hof, Dan Hoff and and I can see why investors are turned off because he clowns himself constantly by he's he's blaming the cancellations at Southwest Airlines and the lost luggage over a very small sliver of an executive pay that is used to make a subjective assessment. Based on a Dei ESG component again. It's, it's not tied. It's not tied to any objective criteria. It's a very small percentage of overall annual pay and he claims that that is the reason why the share prices tanking and why they lost all that luggage. So I would assume that any investor who sees this thinks that this is a clown show like they're not serious. People was that about Southwest in particular South. This was a particularly about Southwest Airlines. Yes, okay well Justice, yeah, we didn't analysis of South West board and it turns out that all of the things that you said are stupid. because yeah, it's either because it's either a misunderstanding of what proxy data is Orson or it's an intentional misunderstanding to come up with some bullshit political message, I mean yeah. So why is it sounds like half dozen one. Why is he wrong man? So we did the analysis, right? We actually, I can tell you we looked At everybody on the board. So for instance we looked at Bill Cunningham who has been on the board for like 20 years in his best friends with Gary Kelly and a whole bunch of other board members strive voted for Bill Cunningham. Bill Cunningham is like we could identify as one of the highly interconnected really old sort of outside influence directors that has repeatedly not funded Tech upgrades to a track, your luggage and B. Make sure that, you know, tickets work, and that and the schedules work. If you want to know the Dei problem, it's that you have not enough of the Dei. At the on the board or in management? Maybe that's your problem. I remember I was pointing out that Southwest in particular is an it's a very old board. It's super old, it seems like an outlier for age old. It was off the chart and the one thing that you'll notice if you take Dei seriously. So when we say Dei, let's, let's say it for what they're saying, it is. It's black people and women, that's what they mean by DJ. That's okay. And gaze if they could figure out what they can find them but what what that class of directors, what they do represent because we can see in the data is they're just younger overall. Yeah, well, there you go. That might be a start to finding people who understand tech, for instance, just find some younger people. Yeah, I like that. I actually, maybe I'll make that a whole segment. I want to play that whole video. The article also pointed out that there's a new CEO over at strive Asset Management. A man actually believe it or not who came from Calpers, the the giant California. Pension fund, a man named Matt Cole, who spent 16 years, running bond portfolio's. Yeah. Did he run them or was he like an associate? On the on it, like underneath the portfolio manager. I like that. This is their, their version of a non-political figure Matt to run. Their company is described this way. He's a deeply religious Christian but but not, but not outwardly political. Oh, that's their solution to clean up like the rampant right when politics over their strap. So there you go, it's fantastic. And just so you know, I the the we do something called the Influence weighted age of a company. So you can take that most influential person or, you know, multiply their influence time, their age and look at how old a company's decision makers are rather than how old they are and average. And Southwest was the 199th percentile. I believe it's all Airlines. It was by far the oldest of all Airlines and tenure as well. They were their average, their average tenure, or the influence, waited 10 year, was like, 10 years where Delta JetBlue American all under eight years. A little bit to give you a quote, one more quote from stray. This is Matt Cole. New CEO over strive says, don't get me wrong. We believe that shareholders are more important than other stakeholders. And maybe it's the other stakeholders that lost your fucking luggage, which is odd because you're, you're by being too political. You essentially, you are kind of bowing to the stakeholder sentiment, right, to other stakeholder settlement. But anyway, he's also says we do think the corporate ESG movement has been valued, valued destructive and politically motivated. It started with don't hire slave labor in China and now it's become something else. What is this misunderstanding of the, of the historical timeline of ESG, anyway, Matt, it's what it started with. Don't hire slave labor in China. What, what understanding of the movement does he have? I don't have. I'm not sure what time about. What is he talking about started? 3,000 years ago, right? Like, it's actually older than like traditional capitalism and it had nothing to do with China. But what does he specifically even referring to the weaker? Deep Obsession? Well, there's some, they're trying to connect the Political talking point that he's using. Yeah. In his a politics explained this to me because he sounds like a moron. He tries to kill there. Been trying to connect how corporations don't care about using uyghurs in China but they do care about employing more black people in America. Like this is their the hypocrisy of but it will capitalist movement. But the inference here and he says it started with don't hire slave labor in China. Now it's become something else. It sounds like he's saying that they don't hire slave labor in. China thing was. Okay, that was that was fine. That was good. I don't I maybe he's saying that maybe. Yeah. It started off with the with good intentions? Yeah, no slavery. Why is that good intention? They don't believe in stakeholder Capital to. Why is that good? That should be bulshit, too. Why do they care? Yeah, why do they care? We should use more slave labor. Shouldn't wait, what's better for stick shareholders. Yeah. And what's that? I did a deep dive into the ESG working group members of the Congress who were part of this ESG month. And, and to a All to know to all of them. All 100% of them voted. There was a weager act in Congress, a couple of years ago, they all voted for that. That's like the only socially left human rights. ESG ask thing that they all seem to support, I just, I just wish someone would explain to me why Matt, why is that ESG nugget? Okay. But all of the rest of it is shitt. I don't because it's anti-china anti-china, got it. It's just so it's really, it's the leaders are Muslims. I mean so that's weird. Yeah, so I don't understand the pro Muslim for once, but because they're not pro-muslim, they're anti anti-china but this again, but this is a very ESG move, but it's a very ESG move to care about Labor and stakeholders Grand ironing. If you were to back out and you were to say, what is best for shareholders period? Like what is the the Pinnacle of best for shareholders? It would be there's no labor costs. As in every one of your workers was enslaved or you, you minimized the cost of them, it would be that like TSR share share price goes up which means you should be able to manipulate it in any way possible, that's great for shareholders, you manipulate the cost up the best. Thing for shareholders is using slave labor in China. That is the best thing. Absolutely celebrate anywhere anywhere. Yeah, just find find somebody enslave them. And that's right. Moving on the Biden Administration, tired. Yeah. The Biden Administration. Reveals tougher guidelines on mergers showing its commitment to an aggressive antitrust. Agenda aimed at telling the power of big Tech. This is the same the biggest antitrust movement since priorities established under Ronald Reagan. The only thing that's unclear to me here and they're gonna announce more details into this big push later. Today, I think is in light of the fact that the FTC chair Elena's, you know, quote, unquote, failure to control. The merger between Microsoft and Activision. What, what does this mean? What, what do these tougher guidelines mean, do they mean anything or was just kind of political fodder? I just, I don't care. Just wake me up when you break up, metal break up something. Yeah, I do something. I would agree and I would just when Lina Khan, or Joe Biden call me. I would tell you just pay just just start with meta and don't quit. Until you're done, just keep meta. Keep at it. I don't understand why, like, we even tried to make an example of the Microsoft, that one either like seven Bros in their basement play, Call of Duty and that's where we're making our stand. I don't understand, you have a company that has more than 80% of the entire industry Consolidated underneath it, and not just company, is not a company, it's one guy with dual class and it's not just like 80% of an industry like selling phones or selling like, you know, I don't even know like Gmail or something stupid like that. It's literally, the means to, which we communicate with each other. It's the way that it's way the Earth talks to each other and broadcasts news. I mean, you know, it's unbelievable. That we're making our stand about Call of Duty moving. Moving on. There was a big report or the BBC yesterday about toxic culture of sexual assault harassment racism and bullying at the McDonald's. Don't tell me, don't tell me. Oh, I want to guess the company. Yeah, it's too late. I think I already said It's any company. This could be any company that might be true, unfortunately, but this is covering 100 current in recent UK staff at McDonald's. The BBC began investigating the working conditions at McDonald's in February. After the company signed a legally binding agreement with the equality and Human Rights Commission in which it pledged to protect its staff from sexual harassment. So this is what came after the BBC independently. Well, but I will say, what's interesting. The reason why I'm covering this story today is I'm always fascinated with the way media. The way it portrays business news in general is that this is a big story out of the BBC, a big story on some Outlets. But when I go to, like, CNBC and I click on McDonald's, It to look at their recent news, nothing they. So I'm just, I don't know, I just, I'm just fascinated with this kind of stuff like this is because this is a stakeholder capitalism, right? This is, this would be stakeholder. Capitalism news know that the way so strive does not care about the right, okay? Because they don't care at all about that. Well, then the next, yeah, say yeah, I will say this. Um, and we don't talk about this much here but Scott Galloway on pivot and the Prof. G podcast talks about this all the time. He's writing a book on it. He talks a lot about masculinity and toxic masculinity and recapturing masculinity stuff like that. Recapturing masculinity. Yeah, somewhere. Yeah. It's the idea that there's like this, like men don't know anymore, how to be men because they've defined themselves basically, as a bunch of, you know, grumpy smoking. Steer herders. I don't know what they Define them, okay? So now it's difficult and men are more likely to commit suicide. Now they're less likely to have an education, they're more likely to be lost in the job market. All of these stats, a lot of which I understand, but I will say, what, I read a story like this maybe rule number one, could be stopping people. Like the, they're just shouldn't Like a sexual, like touching someone ever when they don't want you to or they didn't ask for it. Can't that? Just be rule. Number one. That's not manually. That's not masculine. I'm just strikes me when I whenever I see these stories is like, what is that instinct? Stop it. Here's here's another reason why I'm covering this is. And then in the next iteration of our beautiful platform, free flow analytics. When we're finally able to tag our content to the companies until we have a client, yeah, you'll be able to go to the McDonald's page. Not only see, you know, we want to see the performance of the board members and see their influence, but you'll also be able to see the stories like this, right? Alongside won't be like, see won't be like NBC that's trying to tell you. And finally, before I move on to, um, I did do a, I spent way too much of a time in a deep dive, on the ESG, working group members. This is the, I like this is the Republicans in the Congress who are spearheading this ESG month. So self-titled ESG. Yeah, they called it that. Yes, she month. I don't want to bore you with this, I hear my takeaways. I kind of gave up after I the first three people I looked into bill has anger and Wagner and Barry Loudermilk. The one thing that was clear to me, which is also clear, its strive is that this is very much based in a religious movement, and I'm not saying that based on subjective criteria. I'm just saying, objectively, I found that that these people are very much aligned with a Christian Movement, okay? But again, I stopped looking into that because I got bored and scared. The other thing I wanted to tell you is this tidbit because it tickled Me, Andy ugly, oglas ogles. Ogles. Oh from Tennessee, one of the ESG, working group members working to basically get rid of ESG. I like this part of his story. He's a self-proclaimed Economist who according to so, journalists looked into his background. Despite being a self-proclaimed Economist, right? Who would seem like a good member to be on this ESG working group, right? Because you need people who understand Finance or the economy, he took it turns out he took only one Community College economics course, which he barely passed. And that at College, he enrolled in the US, president crowds, and government political Theory and national security policy fail to every one of these courses. Three years later. He took them again. And again, I and I looked at this, this is from a newspaper in Tennessee. I looked at his transcript and indeed, I've never seen this before. He, he got an F and all those courses and, and yes, he took them again and get an F again. Like this is one of the, this is one of the key members of the ESG working group working to destroy ESG, is a guy who lies not only about his background educational record but also it's just kind of a general failure. Well he did say about that that this that there was a hack he blamed his it's not educational background on a hack. Also said he doesn't remember saying he had an economics degree. Yeah I'll tell you why. It's not a hack because this transcript of this new paper file was from 13 years ago and it was like a they there's a picture of it. It's a it's definitely like a printed transcript that we all lost owe. People used to get this is not a, this is not a hack created by some weird website. I mean this is a physical transcript. Well, I will also say that it is a little bit dubious as claims, because he is not only his educational background was found to be semi frogging to fraudulent. Yeah. He also then claimed, he worked in like a whole bunch of other places that he never worked. Yes, he might be is, is he the original? Who's the rep from New York, that is a Horrible now George Santos. Yeah. He's the original George sand. Okay. Maybe and the only reason why I'm pointing this out is because you're working. And they are ogles or whatever your name is as you're working to destroy ESG. You realizing that this is why say the g is so goddamn important, is it allows us to understand G is it allows us to understand who these people are and what they're up to, and you give. And then you give investors a choice of whether they want. Just like in the real democracy, in the alternative democracy. Now, we have the choice as investors whether maybe we want to both this director out for being a fat dumb liar. I actually have no proof that he's fought. I have no proof about know but he's a dumb liar. I do too much. Totally similar. And in fact it's exactly the same. Here's what I have for you. It's why you're bored matters. You pulled two of the biggest board-related stories ever ESG. Maybe ever for our, those two things were the Tesla Board clawback of board pack nearly a billion dollar, callback like three quarters of a billion dollars and BlackRock adding CEO of Saudi aramco, to their board. You, let's start with Tesla, okay, the lawsuit accused and you said this already musk of stacking, the board of his friends and family and sharing outcomes, he wanted and avoiding independent oversight. I am not going to say this is Elon musk's fault. Nor am I going to say this is the board's fault. Okay I am going to say this is the fall of shareholder capitalism and do you want To know why. Yeah, sure are the vote for directors in the last four years. For the Tesla board members. Now, Tesla has a classified board so you can't vote them all in. As part of, yeah, they can't even get every year. There's been a proposal to either reduce the term of directors from three years to two years or to make it one share, one vote and they cannot get 66%. They need 66% supermajority to agree and again, get that just so we're clear. This is yeah. Another mechanism that Elon Musk uses to, to maintain control over the board because because I'm sure he'll get angry one year. They can't vote everybody out at once. Play part of the problem here is. Elon Musk only owns on now. He owns about 13% of the shares but he's owned, you know, between 1816 percent of shares, So he hasn't had enough by himself to kill the supermajority, if you had up him and his friends, they still don't have enough to kill the supermajority. What is that mean? That means there are enough other investors, you own shares in this company who continue to side with Elon Musk. The same is true with the directors. If I exclude Elon musk's vote's, Robyn, denholm named in the suit in 2023. The real vote was 30% against her. Now, that's a lot. Yeah. But that actually means that's a whole lot for her. 70% of the other shareholders said, she's good to go JB, Strobel his best friend 16% against was the real number the in 2022? Ira rents, 33% against still 2/3, voting for Kathleen. Wilson Thompson, 30% against that means 70%. Four denholm in 2020. This suit goes back from 2018 to 2022. Denholm got only 13% against everyone liked her. You don't stack the board without accomplices. That's my point. Yeah, the music to meet Matt is that Kimball Kimball Musk. He gets voted through, he gets voted through. In fact, in 2023 ISS suggested you vote against JB Straubel because of conflicts of interests with Elon Musk. They suggested you vote for Kimball musk. This is the, yeah, this is one of the proxy advisory that Republicans are so angry about their they. Yeah, they they're so weak when it comes to actually exercising. Its power over corporations that they won't even tell shareholders to maybe maybe having your brother on the board as a bad. Maybe it's not the best idea. You mentioned that this is the Detroit police and fire retirement fund. One of the rabbit holes I went down was trying to find how they voted. Oh, on Tesla, over the last five years. Okay, no data they don't disclose it at all. It's nowhere, there's not even a policy. I couldn't find whether they used glass Lewis or ISS, or they do it themselves or somebody else, I couldn't find anything, but my guess is Even the Detroit police and fire, pension fund. Was voting for some or all of these directors. Why is that your guess that's my guess? Because they Outsource all of the vote to to proxy advisors who have uniformly. Voted in said it's okay it's cool to vote for these people. So they only care when they sue. But when it comes to exercising your shareholder, right investors where are you? You're the you're an accomplice that three quarters of a million dollars shouldn't go back to Tesla and their shareholders. Because you're the fucking idiots who keep allowing Elon Musk to have a stacked board. It's a one share. One vote company vote the fuckers out. But what we've been told when we try to sell them, our data is that it's really aggressive to vote against director. We've been told that by Institutional highly sophisticated shareholders that our data, suggesting that people underperform and that you could vote against them because you have data to support that would be really, which is massive, which is always a quote, really aggressive, which is odd to me because I would see as an aggressive act. If you control the voting power, like, if you had 53% of the vote and your vote against the director meant like that director was gone, I could see that as an aggressive act, but you're talking about investment companies that can control probably less than 1% of the vote, right? And that's seen as an aggressive act know, even if you control 10% of the vote, which is what ring rarely happens, though. I mean, even, that's, that's very high. Yeah. Like their job. They are hiring someone to Steward their cat know. I know, I realize I realize but it's not controlling the vote though. Imagine if someone said to you, it would be really aggressive for me to say that you're not good at your job and I was your boss. So, I hired you It's odd like we we hire and fire people in this country like, like it's like, it's nothing unless you're a union. It's it's like you can get fired tomorrow for no reason. Just get a slip in the mail. It says like sorry you're two weeks or, you know, and you're gone. I mean, and yet it's really aggressive to vote against vote against a director. Who is you are hiring to Stewart your Capital. That's what their job is. And my main takeaway here is ESG month, is that this once again proves that the ESG industry investment firms, they're not slowly dismantling. Corporations and voting against no management. They're, they're keeping it going. Not only because they just don't, There Is No Agenda to break down capitalism, but also, because they're even too afraid to look like their care. According to yeah, like it actually a quote like that. To me, proves our theory that capitalism is not a science. It's not about cash flows. It is a Kabuki theater. It is a social construct because if you are afraid, if you're too much of like, you're directors are so so snowflakey. Yeah, about getting a vote against them and you're afraid to offend them. Then what are that's not capitalism. That's not excellent. That's not measurement. That's not data. You're doing that. Because like, you're afraid your buddy at the golf course is going to be pissed with your vote. That is the absolute wrong system. In fact, strive might, the only thing that might be doing right? Is they aggressively voted against Directors. They don't agree about women. Female directors. Yeah, yeah. But they're doing it right. Like they're doing what more investors should be doing if they use data. If they actually had a query of the Universe, I was gonna say. You're you're also supporting once again. While you don't want to get rid of ESG data, I don't care how you use it. You never want to eliminate different ways to evaluate the people. I've got an idea. Let's have running your company. Yeah, which brings me to number two about Tesla, the settlement wasn't ever about friends and, and pay on the board. In fact, Tesla in their board settled. Because during the discovery process, the judge presiding was about to release Communications with their auditor. So they would have had to release a whole bunch of audited like Communications with PWC and Communications between a director and Tesla's general counsel, Steve jerve atsion was complaining. He didn't get enough compensation, he didn't get compensation. He thought he was entitled to probably because he only got 1.2 million dollars in director compensation. Compared to Kathleen, Wilson Thompson, who made 7.3 million dollars in the year of the communication. Well, in options to put this in cash to put to put this number into perspective, the entire Southwest board which is about 12 13, 14 members in aggregate made just over 1 million dollars last year, correct? Yes, this is one director who made 1.2 million is upset about it. These are people who were complaining that they weren't making enough, and they were getting 1.2 million in options. I don't even know how they were allowed. That even here that was 2020, right? I don't even know how the SEC or the listening exchange allowed. These directors are called himself and dependent after getting so much money on sleep. But really my takeaway was not like this is a great G Moment where we're flying back. Finally. And congrats to the, you know, Detroit police and fire pension. Yeah. This was that if investors actually cared and did their fucking jobs, they would be voting. Totally differently. They would musk would not have more than 70% of the board influence. He would not kimbal musk. Would never be there. He's still on the board ISS still recommended him. It shouldn't be the case period. That was. So that's number one with Tesla. Okay, number two with BlackRock and I'll keep it short because can't be a 4/7 hour show. I can't yawn another 455 times. Yeah, I know it's great for the live stream when you're yawning but yeah, I know. Sorry. Anyway, we still have Paul coming up Paul, I'm not saying that Paul is yon worthy. I'm just saying we have to make, Paul has been waiting in my green room for 20 minutes. Well, he can, he can wait for another 30 seconds because BlackRock adds the CEO of Saudi aramco, to the board. This is a board as I said, 50% controlled by Fink Wagner and Capitol all BlackRock. Founders are insiders. All the other directors we think that this is like, oh, we're signaling something? To the Republicans like look how oil friendly we are or we are moving off of ESG. If you would actually looked at who's On the board. Now, they already had a member who sits on the board of Kuwait petroleum fund. Oh Vader, already is in oil director. Wow, like he's do we we needed another one for what they have, another director who sits on the board of us, steel, and Halliburton and Gerber. Wow. 60% of this board is already connected in two degrees or less. They all know each other. This is pure Optics. This is just a dog and pony show. This is we're not this isn't real. This is why, you know, we back when Larry Fink and BlackRock became the target of the anti-walk and the anti issue, this is why we giggled for three days straight because there's no one in the ESG World. Whoever considered BlackRock to be woke or no, one of them. That's why we giggled. Yeah. We giggle for like sisters, so it's no surprise to us. That strive asset management is already, sort of changing, its tone and tenor because you don't know what the hell you're talking about in general. Shall we bring in? Let's bring in. Yeah, because I'm like I'm too ranty today, let's bring a Paul Thomas down. Like all right. Paul. Come on in let's let's listen to what you have. Hello there. Pulled Hudson with skates statistic of the week. so, for the last few weeks we've been talking about CEO compensation, and this week, I've decided to switch over to looking at some of us statistics on Direct decompensation. So, first of all, we go into, look at the comparison between the S&P, 500 directors and Russell. 3000 directors, the comparison between the packages is, is not a very differential one. 97 over 97% of directors in both indices receive cash retainers and almost 90% of the Russell 3000 directors and just over 96% of directors, in the S&P 500 also received stock awards Now, stock option Awards which have been going out of fashion for some time now, I was slightly more common in the Russell 3000 than they are in the S&P 500. At 13.6% of directors, receiving them. In the larger index and only 7.4% roughly half receiving them in the S&P 500. Similarly meeting fees 7.6% in the S&P 500 and just over 10%. In the Russell 3000, make up a very small proportion of total compensation for directors, and for other compensation, which can be anything from Percocets to travel benefits, etc, etc. Something I think we might look into next week, there's about 9.9% of directors in the Russell 3000, received some form of other compensation, but it's almost a third in the s p 50029.7 percent receiving. Other compensation in the S&P 500. As I said, that's might be something we want to look into next week a bit more detail at least. So that's our, look at the comparisons between those two indices. And what I'm going to do now is just switch to just the Russell. Sorry, just the S&P 500. And look at the development of direct compensation over time. And I'm sure that this kind of development will be mimicked for most of the directors in the Russell freezers as well. But what we've seen is, A steady decline in the proportion of directors, receiving meeting fees from 12.3% in 2019, as I said, down to 7.6% in the SB 500 in 2023 proxy filings. We've seen not a steady, but an increase in the number of directors receiving stock awards from 95.7% to 96.1% over that same time, period, 2019 to 2023. And again, a actually a slight to decrease in the proportion of directors, receiving a cash retainer from 98.4% down to 19797.7 percent. Not a huge difference. But a difference, nevertheless, for stock options, again. It's actually During the period. It's it's jiggled around. Basically the same, the same proportion from 7.5 percent in 2019 to 7.4% in 2023. But actually the proportion of directors, receiving other compensation, other forms of compensation. As risen from 23.5% in 2919 relatively steadily up to 29.7% in 2023. So the not large changes, the right to compensation tends not to change very dramatically. As I said, the biggest changes has been the demise of the stock option and the increase in the amount of stock awards being awarded to directors. So I think. Yeah, next week I think we're going to have a closer look at that other compensation figure and have a look at Sea, what some of those, some of those amounts are So this is Paul Hodgson signing off for escape statistic the week. Thanks a lot. Bye. Wow, Paul throwing heat and some timely heat too because we're just talking about director compensation and getting all clawed back. Thank you, s gauge. Thanks skh for sponsoring our show that steaming rolls. I'm I was full of BS now. I guess I'm full of BM. That's gonna work going forward. I don't think I like it. We are free float. The show is also sponsored by free. Float analytics.com, go underneath the little login button is a free sign up. You can get the sp500, every director, their influence, and power their performance. It's all there for you to see and check out until Friday when we do a week wrap up. I have a big announcement today. Well, yesterday Ari had her baby. So, are we won't be on the show for a little while, even better. Yeah. Oh, it's here for a while. Re and baby are healthy, is a little baby boy. I got to see him yesterday and you will tell you more on Friday but otherwise tune in then Until then, goodbye.