TSLA director comp, AGM

Welcome to shareholder Primacy from free flow media. A podcast about activist investing Securities Law, and all the ways to financial and legal worlds, intersect and Collide in real life. And I are back and lived in as a law professor at the University of Colorado, who teaches in research, a security and business law and she holds up the legal end of our podcast and that's Mike Levin an activist investor who lives and works in Chicago. He covers the financial side of our podcast and did, you know? That this week is the one year anniversary of this podcast. I did that seemed like a very long time. I hope you realized. Wow, she a year ago and when we started talking about it you know probably a year won't much longer than that. But the first one was recorded and posted the first week of September 2024. Wow. And this is, I know, I know we get along pretty well and this is number 44 out of 52. So I think we've we've pretty much, you know, kept up this kind of weekly as we say, but mostly yeah. Right. So quick. Reminder about our mailbag. I don't know if you want to get you want to give the email? Sure. So we will respond to questions or things you'd like us to talk about. You can just email us at shareholder Primacy. One word at free float dot LLC. Oh cool. All right, so I don't know. What do you want to talk about? What's favorite subject? That we constantly are coming back to what? What's that? Anne. That would be Tesla. Once again, it was talking about Tesla. We haven't talked about it for a number of weeks, part of the reasons, we have a podcast it for a number of weeks, but we did talk about it. I think when they first announced the date of their AGM, but now they've now they've actually put out the agenda. Yeah. For the AGM. So we'll cover that but before we get there there's actually an adjacent subject that is worthy of an update and that would be the Detroit case the one that I got myself in because there's been some developments there and they bear on a little bit. As we'll talk about the AGM that just got just got disclosed. So, why don't we why don't Why don't we covered Detroit for a little while and then and then we can go to the AGM, make sense, okay? All right. Cool. So as everyone who follows us knows there's been a couple lawsuits, we've talked a lot about uh, the first one is tornado and the only thing really to mention their Is that everyone knows it's on appeal to the Supreme Delaware Supreme Court. There's a you know a lot of argument that's going to be made while that appeal. Was scheduled for oral argument on Wednesday, October 15th. So in five short weeks, there's all sorts of arguments that are going to be made. And all sorts of subjects, that will be argued including whether Elon Musk controls, test Tesla, what kind of legal fees? The big one? A big things is legal fees. If anybody had a restore, the pay. Now importantly, I didn't know this but at least this one but I think many adults are Supreme Court argument oral hearings are broadcast. So like even if you can't watch it at the time you can watch it later. Yeah. So I'm I have that date circled. So let's listen to that one so that's turning out but let's talk about Detroit for the walk because there was some, some really cool stuff that happened or cool. You know, interesting stuff that happened. And I think that headline there is that based on some of the evidence that is kind of come out in the appeal to the Supreme Court. It looks like it's possible that the Tesla directors told some lies too. Well, that would be her Supreme Court. Now whether you want to call lies or whatever misrepresented stuff, but there's a fact pattern that emerged here that is is worth describing. So um, I can't remember. Last time we talked about Detroit, but we talked about this quite a while ago. But you were challenging. It's a challenge to the director pay. Yeah. You were challenging the terms of the settlement so this is from the Elon Musk pay. It's absolutely right. And so so that was and that was a settlement that was in a trial and chance to McCormick approve the settlement over my well conceived and brilliantly, written objection, of course, Uh, in January and just to recap, the settlement was for 735 million dollars in cash and options or cash and equity and there were some corporate forms, right? So there was supposed to. So the whole thing here was that the director pay was not properly, you know, voted on by shareholders Etc shareholders. And they settled, and they said they were going to return. The pay. Is that the idea? Yes. Correct. They were settlement roughly a third of what they'd receive. So, the settlement was directors, were going to return, at least some of what they'd received in pay because their pay was challenged, correct. And then they were all going to allow shareholders to vote in future years on directors pay. Okay, so, right, and there a couple of other corporate reforms but that vote, that's your holder vote was very interesting because that that's unprecedented. Anyway, so I read this outdo, man. I didn't, I didn't like, how some of it was expressed. So I wrote some objections to Chance some MCC. Make again, as you heard, she didn't like what I had to say, or didn't agree. And my objections were twofold for the second. One had to do with whether that shareholder vote would be enforceable. We'll talk about that. Another time, the one of the objections had to do with whether the directors were going to pay that settlement as Chancellor McCormick. Put it radially, whether they were going to allocate it among the directors kind of, commensurate with what they'd received. Because you were afraid that, like, Elon Musk would just pay it or something, right? Or early realistic or somebody, right? And that would create some unbelievable conflicts and there's, you know, while all the directors and board, you know, have some decent, you know, well, some are much better able to pay for that than others. So there was this concern, it wasn't disclosed. And so I appealed that and some McCormick at the time, actually. So that's a very good point. She said that in her presentation but declined, to kind of reopen the settlement to try to accomplish accommodate this. So I then I didn't like that. So I then appealed this to the Delaware Supreme Court. Filed the appeal. I did a pro se again. So I represented myself which was kind of fun. So I had to learn you, I'm sure you're familiar with this. It's a lot to learn how to, I had to learn how to write an appellate brief. And so I copied a bunch of people and talked to some lawyers and said, this is how this looks. So there's there are three briefs, there was no opening brief that I wrote and then the parties. The defendants wrote on answering brief and they're actually two answering briefs that were submitted and one from Tesla, the company, and one, from the directors themselves, there's ten tools that were directors at the time that they got. And it's only, we should mention that. The reason for the appeal originally was actually, it was because they were objecting to the attorneys fees that were. Yeah, because it was settled thing. So there was an appeal that was basically the director saying, okay, we're fine with the settlement, we just challenge the attorneys fees and then you all so appeal, and yes, because you didn't like the settlement, right? And testing that Tesla did appeal, Tesla company appealed, the legal fees that the plaintiff's attorneys were looking for, which was somewhere. Over 200 million dollars. So they're trying to knock that down. So in all this process, some interesting facts kind of emerged. Okay, that are that I want to try to recap here. Tesla had said, sort of separately. In a sworn affidavit to the court. That it had received the 735 million dollars from those 10 directors. That in fact it had deposited that money or deposited. Some of the money and also had some of those directors return on exercised options. So the settlement allowed the directors to pay in three parts cash return on exercise. Options are just give up shares and evidently according to this affidavit. They did. A&B cash and returned options. Okay. And that happened, that was that a day was affidavit, was dated like February 26th of this year? So sometime by that date. Tesla had received all that. Okay. Now you got to know of those ten directors five. Are still on the board of directors at Tesla that includes. I think James Murdoch Kimball mosque and like three others Robyn denholm. So, if they were going to return options on exercise options, they would need to disclose that they would need to file an SEC form 4. To show that they had. Relinquished those options to show, you know, like any other channel, when they buy stock they have to file form for when they sell stock. And when they get a receiver, cash options, they all goes informed for well. I filed my open. I mentioned, there were these three briefs opening answering them reply. I find me opening brief on March 31st as a March 31st. There was no form for us on record. So they said those three, right? So okay so they had said that they had returned these options on February 26th but when you filed your brief on March 31st, they had not disclosed that in a form for correct that there's all sorts of things that could be going on. But you know, A minute. Okay. So then the briefs kind of went back and forth. The Defendants filed, their answering brief, and they filed the answering brief after a little after May 1st, but on May 1st 5 form 4, shower an Edgar. Okay, and the company said that there was this, the delay they had to wait to sort of read my opening brief. They tried to explain this delay. But I don't think they did a very good job of it. But anyway, so the form Force show up on me first. And essentially Tesla said that the board had to meet to cancel the options. Which is fine. I don't know how that works. There's probably some some good governance practice or maybe there's Texas law. I don't know how this would work. But anyway, so assuming they filed these forms and a timely way on May 1st the board met. You know, either like April 29th or 30th, you gotta file a form for within two days. Okay, so it is literally impossible for Tesla to have received the options on February 26th. But for the directors who have conveyed them to Tesla? On May 1st or April 29th or 30th. Wow. Okay so either well I mean either there's either this one, it's not like these people don't have a history of not filing. Oh absolutely well. So either either the affidavit this sworn affidavit from the chief accounting officer at Tesla was wrong. I can't believe that's true. Okay? Or the form Force were wrong or late but that's not what Tesla said, yeah. So okay. Yeah, or something happened between February 26th and May 1st where Tesla did receive the money, but they didn't receive it from these five directors. I don't know what. Yeah, but and Tesla all through this process was saying, no, no, we're gonna pay this. We're going to pay their fair share, we're going to pay it right away. And and that that does not appear to have happened. Wow. So I am, I am I am I, I defy Tesla to explain how they received something on February 26th, but the people who paid it didn't pay until May 1st. It was kind of like a former time travel or something. Yeah, I don't know how any of it works as I said, all I know is that, you know, going by Elon musk's history late filings. Yeah, right. So yeah. But again, I don't think, you know, in for enforce get filed late all the time in the SEC, overlooks it and I mean, you know, form four enforcements is just not that strong. So, but but Tesla was really clear in these pleadings that they waited for a board meeting. You know? And you know what, I'm we should do is I don't know how books and records work in Texas. Well you can't get them in anticipation of litigation, oh, okay. I just want to. I just want I just want them minutes from the board, man. I want to know if it has something to do litigation, you're not allowed to get Butters in Texas now, with their new law. So anyway, so the upshot is there's this little potential misrepresentation in place, but Alas and a lack there is not going to be any or argument about my objections. The Supreme Court declined to hear oral argument on those two. The two things I objected to they will hear our argument on the legal feet. Yeah, that's I think scheduled for October 29th. Yeah. So after the appeal on musk's face, after tornado. Yes. Right? Yeah. And both of those cases involved attorneys fees so the court might sort of try to reconcile. I think they might be trying to sort of think about the court. May be trying to think about that stuff. Kind of at the same time. If only because it's two of the absolute biggest legal fee Awards and against the same company. Right? Exactly. So, so that's, that's my, my sad tale. Not. So sad about about this and I'm sort of waiting for someone to sort of try to dig into this and sort of see what happened about how how Tesla could could get something before people pay it. But anyway, um so that's that's the status of Detroit when we'll know more probably in January is my understanding takes like yeah this Supreme Court is pretty quick about issuing, their issuing, their rulings here. So we should hear about this in the next two, three, four months. So anyway, there's more to talk about with Tesla. We got a holy AGM to discuss. The proxy statement just came out last week so why don't we do that? But let's do that. After a break. I'm good. All right. Cool. We'll take a break here and come back and talk more about Tesla here at shelter Primacy. The Primacy is brought to you by free float, analytics.com. The only free database of corporate directors their influence and their performance. If you want to stock or retirement plan go to free float, analytics.com and look up which of your elected directors are performing well and which aren't use your vote in the alternative democracy and get your data at free. Float analytics.com. Now, back to the show, Welcome back to shareholder Primacy. I'm Ann Lipton here with Mike Levin and we're going to talk more about the annual general meeting the AGM at Tesla, which we talked about a couple of weeks ago when Tesla set the date, and when they handed musk, 96 million shares of stock. Um, yeah. So there's a lot of different things on the agenda. We've got director elections. We've got the legally required sea on pay. We have auditor ratification. Yeah, we're at ratified, the auditor. That's always my favorite vote. And then we have a bunch of shareholder proposals and we have more on Elon musk's pay, right. Actually, there's pay and there's another another sort of interesting Another company proposal. But well, let's get, let's talk about the the shelter proposals because, you know, Tesla's a magnet. Yeah. Lots of people like this admit proposals, right? So there are now ten For shareholders to vote on and think about and for the proxy advisors to analyze. Yeah and I think actually See to exclude them. So, I'm not even sure all of them. Oh, that's interesting. Oh, yeah, I would okay, yeah, maybe yeah. Oh, yes. There are some of the 10 may not make it to the definitive, right? So, it's worth noting that what we saw last week was the preliminary proxy, right? Yeah. So that. So, some of the, you know, it's not just going to be punctuation. It's going to change there, may be some substantive changes to what's there, but currently there's these 10 shareholder proposals since that that's, I guess. On top of there was a report last week that there were another 11, someone went to the. Yeah, you can look, I don't know if you know is going their website and go look at all the no action letters. There were 11 that Tesla had succeeded in excluded from the agenda. All right, so of these there are, let's deal with some of the smaller ones. There's one on child labor. Yeah. And it's from NPR which is surprising to me. Yeah, the National Council but the national Center public. Cloud is your research. Yeah. They're conservative organization. I don't, I don't like they're totally anti woke anti-espionage. Here. And that might, you know, that that's gotta just irk the hell out of. Some of the conventional proponents that that ncpr is the one who was able to get that one on the agent. All right. There's another one on investing in Excel. Which of course is musk's. Yeah, it's Twitter. So a shareholder is having a proposal that the company should invest in Ai and it's non-binding necessarily. Yeah. I mean and Tesla is taking no position on this. Yeah, there's no position, right? They're not, I mean, for all the other 10 Tesla's emphatically opposing here oh no. I think it's the company Proposal with the right, all those ten. The company is just opposed to pose except this one where they're just neutral there was a social. But it's just, I mean, On and that will be keeps pointing this out. You don't need to say that can just invest in x-ray, right? You don't need a show if they want to hold on, if they can propose that, right? And they kind of deflect a little bit today, we're going to think about it, if this shareholder proposal passes, we're not necessarily going to invest, but yeah, so there was that, you know, there were a bunch of the other usual ones from John Chavez and had one and Jim Croce, you know, guys, we know and like yeah, there were two others that kind of warmed my heart slightly because they were, they were by long. I know there were well, you know, I, I've, you know, long argued that anybody who proposal Preparatory proposes something predatory should be proposing, something that's enforceable, like a bylaw Amendment. So there's now two of those and these two respond to one of your favorite recent subjects, which is changes in the Texas statute that basically make life hard for Cheryl holders. So one of these bailan amendments that a shareholder Opposed is basically just to repeal and earlier bylaw amendment that the company had passed and that one had to do with Cheryl the derivative lawsuits. Yeah, so Texas and you have to check me on this, Texas allows a Texas I'm using based. I don't know if that's the right not just don't miss out organic. Thank you. Organized. Organized, sections. Well, Tesla for sure is not only organized. They're domicile had ordered and operate in Texas so that Tesla qualifies but if, if a Texas organized company wants to. It can limit derivative of lawsuits to 3% or greater shareholders right before we talked yes with that? Yes, so now Tesla Texas allows it and Tesla took advantage of that to pass a Bible. That says, if you want to bring a derivative lawsuit, you have to have at least three percent of the company, which in Tesla's case is around, 30 billion dollars. Nobody does Have No One's Gonna Come Close to, right? Exactly. So now, the New York State and the New York City comptrollers, who control, you know, the New York Pension funds are have a Cheryl proposal, that would be binding because it would be a bylaw repeal. Yes to repair, yes. So that's one. That's the first the other one has to do with Cheryl the proposals. Yeah. Because Texas similar to this minimum for derivative suits says there's minimums that we're going to allow companies to observe for just to submit your Elder proposals which you'll put a lot of this ESG. So I think we mentioned, so it's a very strange law. Like, first of all, it doesn't apply to Texas organized companies, let me say that again. It does not apply to Texas organized companies. It only applies to companies that are headquartered in Texas or that are listed on the Texas Stock Exchange, which isn't a thing yet. If your headquartered in Texas are listed on the Texas Stock Exchange, they have a new law that allows you to limit shareholder proposals in various ways that go beyond what federal law does. And there are like, you know, 15 billion questions we can ask about their league Ally that little gallery of this law but it's a loss. So we've got a Cheryl The Proposal asking Tesla to not take advantage of this law. Yeah right to amend. Essentially it's kind of meta. Yeah, they'll only do it with shareholder approval something, right? Exactly. So if Tesla wants to do this, They have to gain. So it's, it's it's basically amending the part of the bylaws that required that right? For Cheryl or, yeah, driven amendments. Exactly. If they if they decide to take advantage of this, Texas law, that would allow them to limit share. All the proposals. They have to promise to get shareholder approval of that and it would be in this bylaw form. This proposal is in a bylaw form. Now like it, you might like it that shit. Oh I love. I love amendments, right? That's the problem with Tesla and bylaw. Amendments, is the Tesla's documents I say that if Cheryl, there's passive bylaw, it has to pass by two thirds of the outstanding shares. We just not true of a non-binding proposal because a non-binding, right? It's just so essentially, these are not going to pass. These aren't going anywhere, wait a minute America. There are probably other reasons but here's the thing and this is very much my thing so they can they would have to get two thirds of the outstanding shares to Pass. They will not get that. And at least one of the reasons why they won't get that is because Elon Musk get to vote the board that's about and they hold a lot of share, so it's not gonna be like close to 18 or 19% at that, right? That's just insiders. Yeah, more than that now, right? Yeah, yeah. So I think, well actually, but what it comes down to though is I have had this thing in like that, I've wanted forever. I will never get it, but it's what I want. They will report eventually the vote totals and when they report them they're just going to have shares for and against an abstain, right? I think the SEC should require that they break it down by Insider votes versus shareholders. Yeah, I mean, you can sort of calculate it because if you assume the inside is all voted the same way and, you know, exactly how many shares they have. You can figure that out. But I'm Reliant people like you to do that because I can't do that math. It's just too complicated. But I would I would really like to know if what the public shareholders thought of This. Yeah, and I'm going to have to rely on you. Write the boat totals having some sort of some sort of SEC Blessed Like format, when it's not actually required. Yes, that would be. I would love that. That would be very interesting to see. Well, yeah, either way, like I said, these two bylaw amendments. I I was Pleased that someone thought to amend the bylaws rather than just you know Xerox another except that also raises the threshold. So there's there it Can't well, but that brings us to one of the three company. Promoted proposals which is to remove a supermajority voting requirement. Yeah. Okay so this is I think it's like number eight, I can't remember. Yeah, it's 16 things on that. They're not actually recommending in favor, they're just so this is this isn't actually for their Charter amendments as well, right, right. So this is an amendment to the bylaws and to the Charter from Corporation, okay? And so it's requires 2/3 approval right now, but they're going to then dial back on the supermajority. So anything going forward assuming Cheryl, there's agree with this. Yeah, we're not clear that. Well, you know, things will only require simple majority like to amend the bylaws to call a special meeting to act by written consent, things like that, to change it from a staggered board to a single class board, right? Exactly. So, um, Now the Tesla argues and this is where I think this is a little little instance here. Text Tesla says, you know we've wanted to do this for a while but we were waiting for enough shareholders to kind of want this. Yeah the that's very silly they could have done it when they moved to Texas as part of the movie Texas and and and then they could have done it with a simple majority and i s s actually criticized them. For not putting that in the Texas Charter when they moved to Texas, right? So there's so and the other kind of funny thing here is that, you know, now in Tesla says, okay, finally last year 2024, because in part, because of this ratification of the most complained last year, we finally got 2/3 of the Cheryl's just show up to a meeting. And now, okay, now we think it's okay to put this on the, on the ballot. Okay, I'm the agenda but now that it's there, the board doesn't take a position. Yeah, but I mean the board put that the board's, the winner, this is the correctly. Just see the breakdown of show of inside versus outside of votes, right? All right. So there's this one and by the way, I mentioned, John Shepherd and proposed one of his proposals on the, on the agenda. He has a private attorney non-binding. One basically all the super majority stuff. So there's a little bit of her. None seek going on here. All right, this takes us to the what I think at the meeting is going to be the main event, which is the two proposals pertaining to musk's. Yeah. And now no one of them immense the early paper. And the other ones new let's talk about right? Yeah, we talked about this in our previous when we talked about the Tesla thing like our last Tesla probably. We talked about this. So remember, so what happened was they had in 2018. They gave him this big, massive Grant. The one that Delaware rescinded, 2019, they created a new employee Compensation Plan, a normal one, that would just give stock to employees, you know, as part of their compensation that Explicit, they didn't. Exploit Elon Musk was because he had just gotten the 20th. Just gotten the one in the year before, right? And there were some Maximum amount that they could go out under this 2019 plan. Now shareholders in 2019 and the reason it had to be approved by shareholders was even though normally compensation decisions board decision, you don't eat shareholder approval. It actually legally needed shareholder approval because the NASDAQ has a requirement that any comp plans that include Equity have to be abled by shareholders. So they had it by shareholders in 2019 fast forward to 2025, they decide they want to make sure that Elon Musk gets his pay back. If the Delaware Supreme Court agrees with McCormick that it should be rescinded, right? So they lose if they lose on if they lose the attorney case. Exactly. So they decide. So they they decide to award Elon Musk shares under the 2019 plan, because that way, it doesn't need to shareholder vote because the 2019 plan was already approved by Sharon holders in 2019, so they can avoid a shareholder vote by saying, oh, this isn't a new Equity plan. This is the old plan. We're just using it for Elon. Ask even though at the time they said it was for 11:00 and they handed him 96 million shares in August. And one of the things we said about it was because they used the pre-existing plan, they didn't have to get a vote under NASDAQ rules and they don't need to worry about anything to do with like fiduciary lawsuits in Texas because the past three percent taxes. Exactly. So he gets 96 million shares. Fast forward to today. 96 million is not enough to make up for all that he'll lose if you lose his tornado. So they are asking shareholders to amend the 2019 plan to get. Allow them to give Elon Musk even more shares, in case he loses and tornado to make up for all that. He lost in tornado, if he loses and they are all so amending it because they gave him so many shares earlier this Summer, that there's nothing left for the employee. Oh, they ran out of shares in the plane shows you. It was Never intended to be used for Elon Musk. They ran out of shares to give the other employees, so they're asking shareholders to vote to expand the plans. So that other employees can find finally get the stock that they plan to give them, right? So that's and that's, that's one proposal. And the next proposal is the board plan, okay? Before we talk about the go forward, just to make sure. So what are going to be voting on. Is is not whether musk should get this makeup or whatever that's already been decided. This is a vote to amend the the mechanic, the mechanical Amendment under the 2019 plan. That's the vehicle, so that there's just enough shares to get available for authorized to give you a lot less. But here's the thing about that, I really want to point out. Package back. If the Delaware Supreme Court if you lose in Delaware, let's say you don't want to give him back. But you do want the other employees to be paid. That is not. For you. It's a menace plan and amending, the plan does two things, allowing the board to pay Elon Musk. The shares that he lost in Delaware and creating enough shares to pay the other employees. There is no way to split your vote on that as a shareholder, which is, by the way, an issue under SEC rules which say you're not supposed to bundle that way but you know it's not like anyone. That's so no one down there. Cares about that stuff. Right. So that so that's what that's what me. I'm testing your older that's going to be voting on when I vote on this one. And now there's the the 2025 plan, then there's the go forward. Plan. It's the new which we were all waiting for. Like, what is, what are they gonna do for going forward? And this new 2025 plan? It's another like sort of massive payouts for massive results. It's gonna make him a trillionaire, right? It'll make it with a team. So like, it's in tranches, just like the last one and you know, with market cap goals and if he achieves each tranche, then he gets some operating goals to be fair. There's some operating. Yeah. And that's the thing that like, what's different from the last planet is the last plan was just stop based on basically rises in stock price, share price. And there were some like Evan you stuff that nobody took that seriously but this one has some serious operating. Oh yeah. He has to like hit. Um and I've read some criticism at these goals are really not that big a deal that he'll, of course, like 20 million cars, manufactured in Aggregate, and they're already something like 12 million cars to sell 12 million cars. Get 10 million, autonomous driving subscriptions, and 1 million, robot taxis in one million. AI robots. So, I mean, I don't, you know, over time. So I don't, you know, I don't really have particular opinions on whether these are reachable or not. I know that the board though. Like they warn you in the proxy, the board is a lot of flexibility to decide when these goals are met, which is already like your first hint. I love that. Yeah, but um, but yes. So there are these big. But there are these big market cap milestones in. The first one is in 10 years. He's got a double, the market cap to two trillion dollars which, you know, I believe it to others to talk about whether that I'm a scale. But I, well, Mike, you are not taking into account the effects of inflation and the deal evaluation the dollar, maybe he doesn't do anything and just be dollars that much. That it's two trillion what it was. Previously one. True. I don't know if that happens. Well, a lot bigger problems than the fact that that's not gonna be thinking about Tesla. Yeah. all right, so go ahead so that like You're? Nice one. Nothing here, places, any kind of restrictions on him. I mean, he has to stay with Tesla, but other than that, he can work at his other companies, he can still do Politics, the hope is just that given these incentives. He's incentivized to focus on Tesla. So, for example, he's Tesla is competing competing with xai, for AI stuff. Presumably, the incentive here is that he'll focus on AI at Tesla, rather than xai. Because at Tesla, he gets these trillion dollar rewards if he, you know, if he sells self-driving, cars or whatever. Except the problem is, this is the point that Matt Levine points out, just say I bid now. Oh, Tesla is going to give you a trillion dollars for. Like, if you build XA, if you build AI, well, if you stay with xci and build, it will give you like, do they just bid against each other? The difference there. Is that there? There's all the backers of all those other companies are they don't, they don't have quite the Money or the stock, it they're both competing to get their CEO to, you know, focus on them. This is a little weird. I go ahead. No, I'm just so. There's a shareholder proposal. That is asking Tesla to stay out of politics, which, of course, the board recommends. Right. It's one of those other 10. Yeah. Other than that, though the only mention of politics in the proxy is buried all the way down in the special committee report where this report mentioned that, they think that this PayPal package will also incentivize musk to wind down his political activity in a timely manner and maybe it will I mean, as far as I know, actually isn't all that involved like directly in politics. But the political problem with musk isn't like all created a new party or I'll donate to Trump or anything right now. The political problem with musk is that a couple days ago he tweeted out about declining white populations. I mean, this is the political problem. --No longer than Direct. You know, it's the impact is the impact of public activities on Tesla's business is so I have one last question about the pay plan, or at least one more question about the more to why in Texas. For the new won, the 2025 going forward. Why is shareholder approval, either desired or needed? Or it's not the same thing as the as the this is the NASDAQ problem. So they know they're not going to be sued by shareholders. They know that they are not vulnerable to derivative lawsuits. So, as the only reason, they need to have a shareholder vote and they're being pretty clear about it. The only reason that they're having a shareholder vote, is because this, they're admitting, it's a new compensation package. It's a new competition package for Elon Musk and therefore under NASDAQ rules. They have to have it approved by shareholders but here's the thing. There are two things about this that are just fantastic. So first, they're giving him share's not options shares and it matters financially they point out because like an option, if it's, if you're not in the money, it's valueless. But shares, even if the stock price drops, they still have value. But here's what's critically important, he can vote them, he can vote them as soon as he can vote them right away. And they're doing it, they calculated it out so that they give him shares that will give him 25% of the company, which is what he's always demanded. It'll turn out to be 25% of the vote if he gets them. But It gets better. because, The 96 million, they gave him in August. He can vote those two evils affordable. Right now, their bootable, right now they get rescinded, if tornetta comes out in favor of musk, but he has them right now and he can vote them right now. Which means it lifts his voting power from 13 per cent to 16%, and it gets better. Under NASDAQ rules to approve, a share whole. A new PayPal package. They require a shareholder vote, but because this is not like approval by the disinterested shareholders, the way it would be in Delaware, say like approval by the disinterested shareholders is just Stave off a shareholder vote. A shareholder lawsuit but NASDAQ just says all share that just anyone can vote. So, under NASDAQ rules, he can vote on his own pay package and he's doing it with an additional 3%. Reported, And I didn't have many doubts that it would get approving anyway but it's still funny. They handed him an additional 3% in August claiming, it was under a previously approved shareholder plan, which it clearly wasn't. And now, he has those additional three percent that he can vote to approve. His own new pay package, which gives him more voting shares that he can vote as soon as their well, he can vote them right away, but he promises that he's going to do mirror voting until they're earned even if they haven't investigated. In other words, vote in commensurate with how yeah, until there are. So once he reaches the Milestones then he can vote the however he wants to Wow. And I'm expected to try to understand vote all this. Yeah. Remember sex aren't I? Yeah. Um, the 2019 Amendment where they're trying to give him, give the report a store. Yeah, if you lose this in tornado, it actually says, and this part makes sense that the boards going to have discretion about it. And the reason for that is obviously like if they just hand him that many shares, it's a huge accounting issue. It's a huge tax issue. So give that the board is not promising. They will restore his payback. Is he loses and Delaware. They're going to do it out in their discretion. Okay, fine, totally get that. But it also set The board is not as I understand it, they're not putting it in the 2019 amendments. Committing to only restore. To his pay. If he loses in tornado, instead, they're making a separate promise in the proxy. That their intention is only to restore. If you lose in tornado, it's very strange. They're asking holders to vote on a plan that will give the board essentially unrestricted power to give him back those shares and they're saying in the proxy. Oh, but we don't attend to do it unless he loses and tornado. Except that's not actually. It's not it's not binding on the tornado decision. Yeah. That's one of the warnings that they give you that, once your holders vote in favor, the board is complete discretion to do it. And it was So I don't know what that's about. All right, there are two other. It's worth noting. So, there's 16 proposals of on? Yeah. All right, and we've talked, we've talked thoroughly about a lot of these and I, you know, I again, I'm pretty confident that 10 Cheryl the ones are going to go down. They're not gonna get approved. I'm pretty confident that these pay ones that get approved. It's worth noting what's not in the proxy this year. There's like two things that caught my eye. The first is there once again are no dissident candidates running for the board of directors, which again I have expected for a while for that to happen. It hasn't happened yet. The other thing that's missing. Which takes us back to the first thing we talked about which is Detroit, is, there is no compliance with the corps gov changes that they agreed to in the Detroit settlements. So they agree to a better process for awarding directors comp more disclosure Of the terms and amounts and so forth and director company and a vote. On director for shareholders. So they've partially complied with some of the terms of the settlement because they got 735 million dollars from everybody. Though we're not sure who paid it and that's still I'm gonna wonder about that for a while but none of these corporate gov change so that but there's other parts of settlement that they have just kind of blown off or at least they're going to wait a year or something. I don't know and I was kind of expecting here. Right? Exactly. I was kind of waiting to be able to vote on director comp finally At Tesla pursuant to the terms of the settlement. In Detroit vs or Detroit feed test. I can't remember the caption, but that's not there either. So, we're gonna have to wait a year to be able to vote on director comp. So that's it. That's the AGM November 6th be there or at least until they filed the infinity, probably in the next week or two. And then we'll know for sure what's on the agenda, right? Yeah, right. Right. Let's wrap up, pop it. We've talked about this, okay? So we have to talk about it again. We'll return sometime soon to the to shareholder. Primacy tested Edition. This is your older Primacy hosted by hand lifting and me Mike Levin. I'm an independent activist investor and advisor investors about their activist situations and is Professor of Law and Lauren wuth chair of Business Law. At University of Colorado, law school. You can find me Mike at the activist investor.com and at waweb, but one word dot colorado.edu. Our podcast is produced distributed by free float media. Thanks for listening. We'll talk again soon.