
Tesla shareholders reject bid to strip Musk of chairman role - gk1
https://abcnews.go.com/Technology/wireStory/tesla-shareholders-reject-bid-strip-musk-chairman-role-55676119
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dayaz36
>"Tesla CEO Elon Musk has rebuffed a shareholder attempt to overhaul the
electric car maker's board and strip him of his role as chairman"

Actually, the _shareholders_ rebuffed a shareholder attempt to strip him from
chairman role. The article makes it sound like shareholders are in contention
with Elon when the opposite is true.

~~~
JumpCrisscross
> _shareholders rebuffed a shareholder attempt to strip him from chairman
> role_

Do we have a vote breakdown for independent shareholders? Musk owns 22% of
Tesla [1]; a majority of shares are held by people who are his family or close
personal friends. The measure could have passed with a minority of independent
shareholders' support.

[1] [https://corpgov.law.harvard.edu/2018/04/23/elon-musk-and-
the...](https://corpgov.law.harvard.edu/2018/04/23/elon-musk-and-the-control-
of-tesla/)

~~~
adventured
> a majority of shares are held by people who are his family or close personal
> friends

Show me the evidence that the majority of Tesla is owned by Musk + his family
and or personal friends.

Institutional ownership is 61%. They hold ~$30 billion of the company. Firms
like Fidelity, T Rowe Price, Baillie Gifford, Vanguard, Blackrock, Bank of
Montreal, etc. all control dramatically more than Musk's family and friends.

[https://www.nasdaq.com/symbol/tsla/institutional-
holdings](https://www.nasdaq.com/symbol/tsla/institutional-holdings)

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Consultant32452
Tesla has the biggest short position of any stock. Beware astroturfing.

[https://www.forbes.com/sites/chuckjones/2018/04/15/tesla-
has...](https://www.forbes.com/sites/chuckjones/2018/04/15/tesla-has-the-
largest-short-position-of-any-stock-followed-by-the-faangs/#4061ba161573)

~~~
Cthulhu_
I'm glad the vote didn't pass; if Musk were to be ousted, Tesla's stock would
crash and the company would be dead. Not dissimilar to Apple, except I get the
feeling Musk has a much bigger influence on the company than Jobs had at the
time he was ousted.

~~~
agumonkey
publicly maybe but I'm pretty sure internally Musk is way less important than
Jobs at Apple

~~~
jernfrost
Really? What makes you conclude that? Elon Musk is kind of like Steve Jobs and
Wozniak molded into one person. Musk has deeper technical knowledge than Jobs
ever had while he also has some of Jobs intuition about design and products.

~~~
busterarm
The cultish adoration of Jobs is strong and they exist in their own reality
bubble.

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arijun
So much of the value of the company is tied to Elon Musk's vision. If you
think he's going to fail in bringing about that vision, then you should think
the correct value of the company is much lower. In which case, you shouldn't
have enough of a stake to vote Elon out.

~~~
macintux
There are many good reasons to think that regardless of the person(s)
involved, the chairman of the board should have oversight responsibilities
over the CEO.

~~~
pavlov
Yes, in a public company it’s just basic good governance that the CEO and
chairman should be separate people, not just separate hats for one
unquestioned leader.

Case in point: Nokia was enormously successful in the ‘90s with Jorma Ollila
as CEO. In 1999 he was also named Chairman of the Board. That is essentially
when Nokia started its downward slide of coasting on past successes.

~~~
bald
> Case in point: Nokia was enormously successful in the ‘90s with Jorma Ollila
> as CEO. In 1999 he was also named Chairman of the Board. That is essentially
> when Nokia started its downward slide of coasting on past successes.

sample size 1

Correlation != causality

~~~
braythwayt
The expression "case in point," like the expression "exempli gratia,"
explicitly offers that a certain thing is an example of a phenomenon, not
justification for it.

Therefore, while it is extremely interesting to ask if concentrating power is
a cause or consequence of institutional rot, I don't think we can complain
about a sample size of 1 if the argument doesn't say that this one case proves
the effect.

But yes, it is extremely interesting to ask whether removal of oversight
causes rot, or if it is a consequence of rot. In other words, if we randomly
appoint certain successful CEOs to chair their own boards, will their
companies do worse than a control group that retain separate governance?

Hard to conduct that experiment, but it would be interesting. Thanks for the
suggestion.

------
RyanShook
Insightful Reddit comment regarding Tesla’s current financial condition:
[https://www.reddit.com/r/news/comments/8owkmg/comment/e06xe3...](https://www.reddit.com/r/news/comments/8owkmg/comment/e06xe3v)

~~~
marvin
There are a lot of subtle errors in that comment. Many points contain part of
a truth, and some are outdated or based on speculation. I can’t go through it
point-by-point now, but just thought I would point out it might not be as
insightful as it seems.

~~~
RayVR
If you have an actual response you should take the time to write it or not
respond at all. Just saying “don’t have time to explain but this is wrong”
doesn’t do much good.

~~~
Brakenshire
Which competent person is going to have time to sit down, research and write
out a point by point rebuttal? A 'one way hash' argument?

~~~
mkirklions
Someone that wants to be listened to.

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erikb
I'm already quite excited about the likely documentary that will follow in a
few years. There are just so many elements that one can't see from just
reading the news.

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raverbashing
"Tesla minority shareholder launches stillborn bid to take out the chairman of
the company"

I'm not sure if this attempt is just a pathological need to show off or just
some MBAtitis.

Activist investors are an annoyance of public companies.

~~~
txsh
Investors are owners. They own the company. You're saying the owners of the
company are annoying to the people working for the company.

~~~
jernfrost
When we hear the word "owner" we associate that with full ownership, as if you
own a car, house or whatever and take care of it and use it.

This kind of ownership is much closer to lending money to someone. While they
are technically owners, emotionally speaking the arrangement is much more as
if Elon Musk owns the company and the "owners" lent him money.

Elon Musk is the person who has built the company and spent a considerable
amount of time working in it, putting his heart and soul into the company. An
investor can jump in at any time and become an "owner". Does not mean an
investor has the same emotional attachment to the company.

Say you build a house with lots of efforts over many years and live there for
decades. To pay the bills you sell ownership shared in the house to investors.
What happens to that house is going to matter a lot more to you than the
investor.

It is not without reason that family run companies often outperform stock
owned companies. When you have an attachment to a company beyond mere short
term profit, that is a stronger bond.

~~~
jacquesm
> This kind of ownership is much closer to lending money to someone.

No it isn't. It's 'fractional ownership', a mechanism designed to defray the
risks of a single venture across multiple people because the risks were larger
than any single individual could bear. The case that created it was the India
runs with ships that could carry more valuable cargo than any individual could
afford to buy or insure.

Spreading that risk through fractional ownership eventually led to the
stockmarket. So it absolutely not at all like lending someone money.

~~~
jernfrost
I thought it was abundantly clear that I know that. In context it should have
been clear that I was referring to the psychological aspects of it. To the
person starting a company, it will not "feel" very different from borrowing
money from someone.

What you are talking about are the concrete technical differences. We have no
disagreement on those.

From the perspective of a person starting a company, he has to decide how to
obtain money for building the company. He can borrow or he can issue stocks.
Both methods give him money. The difference is in how the risk is spread and
how the benefits are spread.

The person starting a stock company can't pay profits to himself without also
doing so in equal measure to other stock owners. With the bank he only has to
pay the interest on the loan.

