Mortals plan and the gods laugh.

With the caveat that it’s 5 in the morning here and I may be misreading, in which case I will correct this post or delete it entirely to hide my shame…

Tesla’s new proxy asks shareholder approval for Musk compensation, which we expected. But there are two elements.

The first is a go-forward plan which pays out massive amounts of shares if Musk meets dramatic new targets. I don’t have a whole lot to say about this one, except that the targets are meaningfully different from the package awarded in 2018 (and rescinded in 2024 by Delaware) in that they don’t just include share price increases; they also include sales targets. The 2018 grant only included share price increases and revenue/EBITDA targets that were pretty much matched to the share price increases, leaving the price increases as the only meaningful hurdles. I will let others weigh in on whether it’s a similar situation with the new proposal, but the sales/subscription requirements are a new feature that was not present previously – and, dare I say it – could in fact accomplish the task of forcing Musk to focus on Tesla rather than his other companies.

But that’s not the only thing.

As Mike and I discussed in a Shareholder Primacy podcast, the Tesla board wanted to award Musk all of the shares he lost in Delaware, to be paid if the Delaware Supreme Court affirms Chancellor McCormick on appeal. But NASDAQ rules say that no new equity compensation awards can be paid to officers without a shareholder vote. And they didn’t want to hold one.

So, they dug up the equity comp plan from 2019, which – developed one year after the 2018 grant to Musk – was intended for all employees other than Musk. It said so right there in the plan (“in January 2018, we granted a performance-based stock option award to our Chief Executive Officer, Elon Musk … that was designed to be his exclusive compensation over its term, which is up to 10 years. … Consequently, we do not currently expect to grant any new equity awards to Mr. Musk under the 2019 Plan or otherwise until the completion, expiration or other termination of the 2018 CEO Performance Award.”) The 2019 plan was approved by shareholders at that time. Now, this August, the Board claimed they were permitted to use the 2019 plan for Musk, and because it had already been approved by shareholders, they didn’t need a new shareholder vote. They used that plan to award him about $29 billion worth of stock, contingent on losing in Delaware.

But that didn’t cover the full, lost 2018 grant. The Board was limited in what it could do, given the terms of the 2019 plan.

So, now the Board is asking shareholders to amend the 2019 plan, to allow them to – in their discretion – award Musk the remaining shares from the 2018 grant, if he loses the Delaware appeal.

And, because the sudden grant to Musk from this summer depleted the shares available to pay other employees (which was what the 2019 plan was intended to do), the Board is asking to amend the 2019 plan to add additional shares, to pay out to everyone else.

Also, please note that since this is a vote under NASDAQ rules and not for cleansing purposes, Elon Musk and Kimbal Musk get to vote. (“The Nasdaq rules do not restrict interested directors or officers who are also shareholders from participating in this vote. Therefore, the Board has determined that the required vote for each of Proposals Three and Four may include shares of Tesla stock owned, directly or indirectly, by Mr. Musk or Mr. Kimbal Musk.”) It’s not for cleansing purposes because Tesla took advantage of Texas law to adopt a bylaw barring derivative lawsuits by anyone with less than 3% of the stock.

Also, of note, the NYC and NYS Comptrollers are asking shareholders to vote to repeal the bylaw Tesla adopted under Texas law that bars derivative lawsuits by anyone with less than 3% of the stock.

And another thing. Mike Levin and I are back with a new Shareholder Primacy podcast. This week, we talk about Intel, and we answer a mailbag about constituency statutes. Here at Apple, here at Spotify, and here at YouTube.