Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
Tesla Has To Explain Elon Musk’s Weird Package
I’m getting kinda sick of Elon Musk being all over the timeline and I’m clearly only making it worse by writing this, but it’s important and in a week everyone’s going to be talking about it so we’re all just going to have to get through it, together. Next Monday, barring any shenanigans, Elon Musk’s team is going to have to go to the Delaware Court of Chancery (a real thing) and explain to Judge Kathaleen McCormick why it’s ok for him to approve a giant payout to himself even as he seems to control the board. If you were curious, Judge McCormick is the same judge that essentially forced Elon Musk to buy Twitter. Why can’t Elon Musk just pay himself whatever he wants as CEO of Tesla? Because it’s a public company and minority shareholders, one of whom brought the suit, argue that the CEO of the company and his buddies have a fiduciary responsibility to carefully consider if the compensation makes sense and didn’t do so in this case, which resulted in “the largest compensation grant in human history” according to the filing. I’m not sure how they can prove that but I can’t think of an alternative. Of course, shareholders voted and approved this compensation package. From a Yahoo! article about the case: Clearly, Elon Musk is solely focused on making sure that Tesla is a success and his compensation is therefore fair. Clearly, clearly, nothing else is distracting him at the moment and he isn’t out begging Stephen King for $8. “Musk’s problem is that he has close ties to a lot of directors,” said Tulane University law professor Ann Lipton. “If you are deemed to be a controller, conflicted transactions cannot be cleansed with a shareholder vote alone. You also need a disinterested and independent board committee, and a more formalized process, which wasn’t followed here.”
Ford Asks Gov’t To Be Cool With EV Rules
The new EV tax credit rules, which were written to encourage automakers to move away from an over-reliance on certain countries, have not been met with enthusiasm by most carmakers. Now Ford is asking for a little leniency in the interpretation of those rules, according to this report from The Detroit News. There’s always a balance here. These requirements are going to make EVs that would otherwise qualify for an exemption more expensive in the short-term. In the long-term, creating an alternative supply chain should lead to cheaper EVs. The list of foreign entities of concern includes China, Venezuela, Russia, Iran and others. Ford urged the Treasury not to disqualify joint ventures with non-U.S. partners that aren’t from a listed country; non-U.S. companies that aren’t organized in a listed country if it’s less than 50% owned by a listed country; and any U.S.-organized company regardless of owners.
Is American Axle Actually Available?
Last week we shared a report about American Axle allegedly being in talks to sell to a larger conglomerate. Today, American Axle put out a press release to essentially say not so fast: The story we cited was from Bloomberg and, since Bloomberg is usually pretty good, this brings up some interesting hypotheticals: In the ordinary course of executing on our strategic plan, we continuously monitor market conditions and assess industry developments and we regularly consider strategic opportunities that serve the best interests of the company (including our customers and associates) and its shareholders. We don’t know the answer so we’ll just have to wait.
What Happened With The RM Sotheby’s Auction Market?
There was a big RM Sotheby’s car auction in England over the weekend and the results were fairly interesting. It should be remembered that RM is coming off of a world-record week at Pebble Beach where the company moved almost $240 million of cars. The most surprising sale was of Freddy Mercury’s 1974 Rolls-Royce Silver Shadow, which was expected to bring in £30,000, but actually sold for £286,250. Almost as surprising was the non sale of three modern-classic supercars:
A white 1996 Bugatti EB110 Super Sport (Bid to £2.2 million, below £2.5 million low estimate) A 1985 Ferrari 288 GTO (Bid to £3.0 million, short of £3.25 million low estimate) A 1995 Ferrari F50 (Bid to £2.8 million, short of £3.25 million low estimate)
What’s going on? Are these Rad-era exotics not as interesting anymore? Given that a 1984 Lamborghini LP5000S and a Ferrari Testarossa Spider concept sold for above estimates implies that’s not the case. Hagerty’s UK Price Guide Editor John Mayhead has a couple of theories: “It was undoubtedly one of the most impressive collections of modern classic performance cars ever seen at a UK auction. There was some hesitation from buyers, possibly because these are mostly cars that have been regularly used rather than ‘lock away’ investments, but it could also signal a slight reticence on behalf of UK buyers for the many right-hand drive cars.” I tend to prefer cars that were drivers, but that’s just me.
The Flush
What’s your biggest used car no-no? Obviously, most people on staff here will buy a car in any condition, but let’s assume you’re smarter than us. We can only hope that this leads to more shareholders suing CEOs for outrageous compensation, or in the words of the author: “weird packages.” I think not. Point 2. Screw Ford. I was working in Mexico when NAFTA was passed. Ford, Dodge and GM all had fully functional operating plants. The day it passed they started shipping cars. Point 3. Ehh. Point 4. Wait you mean prices go down in a recession?
