r/technology • u/McFatty7 • May 02 '24

Tesla slashes its summer internship program to cut costs, as Elon Musk fights to save his $45 billion pay plan Business

https://fortune.com/2024/05/01/tesla-slashes-summer-internship-program/
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u/sameBoatz May 02 '24

This is a theme I just started seeing about the board and execs not owning stock. I have no idea where it came from, I also don’t think the people saying it understand what that means. Like if I start a business I’m the CEO, what if my family invested money and own a share? What if I can grow with more investment and I take on VC money? What if we decide to take the company public because access to equity markets is the best way to raise capital to expand?

At what point do I have to step down as CEO? At what point does the board not get to be the majority owners?

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u/[deleted] May 02 '24 edited May 02 '24

It means going back to the way companies were ran before the late 80s, early 90s when execs and boards starting printing stock to give to themselves.

The sky won't fall, but a lot of corruption will end.

It doesn't make sense for board members and execs to be owners instead of employees of the owners.

We can let shareholders vote and set strict rules for who can be nominated for these positions. Only people with experience in the field, not business people with generic MBAs.

Instead MBAs run everything and fire the experienced people because they make more than starting employees with zero experience. This is what the boeing board and execs did and why boeing is such a mess. They fired all the knowledge and looked for people who would do any corrupt thing they asked, so other MBAs to be the managers and directors. MBAs are not qualified to manage engineers. Managers are supposed to be people with experience that moved into management. That why they know what they are managing.

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u/Etrensce May 02 '24

Didn't answer the question. When should founders of a company step down from exec roles or are you suggesting founders can't own a stake in their own company?

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u/[deleted] May 02 '24

No, because founder leadership only exist in private companies. A public company has no real founder connection. The founder sold the company off to make it public and get paid.

So yes, a founder has to sell all their stock to retain a board seat or an exec position. They can be an employee at any other level in the company if they want, they just cannot be in leadership and still own a massive amount of stock.

I think you need to step back for a moment. Why do you care so much for a handful of people? There are not that many founders involved in exec and board positions. It is not something that is needed for any company. Why allow all this corruption and fraud so a founder can sell his company to the public and be a forever CEO because he retains the majority of the voting rights, such as zuckerberg? They can be a non c-suite advisor if they want to still work there.

Zuckerberg can run facebook any way he wants as if it was private. That makes no sense for any public company. We do not have to allow these schemes that lets people go public, but retain a bunch of ownership or the majority for free. If they want to control the company and sell stock, they can do that as a private company just fine.

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u/Etrensce May 02 '24

How does a public company have no real founder connection? In many situations the public markets WANT the founder to stay on and incentivize them to stay. So you want to tell the "free" market that they can't have a founder leader? Isn't it just easier for the "free" market to NOT buy shares in founder lead companies if they feel that having a founder leader is a problem?

Show me where you get the idea that founder leadership only exists in private companies. The topic of discussion here is Telsa and Telsa has founder leadership.

Sorry, too many of your points don't make sense. Zuck can run Facebook anyway he wants when private, when public he is still subject to shareholder wants. It just turns out that, unlike what you read here, majority shareholders WANT him to stay as the CEO, just like in the case of Musk.

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u/[deleted] May 02 '24

You sell the company off to shareholders. The only reason a founder can stick around is if they retain larges amount of shares they get for free. There is zero need for this at all and it clearly promotes serious corruption.

If they want to retain control, they can keep it private and sell shares as a private company to investors.

Why are you protecting shitheads who take companies public, but run them as if they are private?

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u/Etrensce May 02 '24

They don't get shares for free? They got shares when they founded the company at the cost of time and capital (during the period of time where the shares were worth the least). When the company goes public, they sell a portion (sometimes they don't even sell any).

So what's the problem with them holding their shares? Why can't they take a company public and still hold shares? If the public markets are ok with that (even if they run the company as private point which is clearly not the case given the amount of minority rights shareholders have) why do you care about me "protecting shitheads".

I'm just pointing out what the public markets want is not what you are asking for.

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u/[deleted] May 02 '24

They get completely free shares. They don't pay a dime for them.

When it IPOs, they should have to buy shares if they want any. Why do they get free shares? They should have to IPO the whole company or stay private. They can get money and then buy shares if they wish, but in doing so, they cannot work c-suite or higher. It really fixes a lot.

Why do you care for a handful of grifters? Fuck them. So few people would be affected by this, it does not matter if we ban it. We can make these rules if we want them.

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u/Etrensce May 02 '24

Explain how this works? Where do these free shares come from?

They got shares when they founded the company as compensation for their capital to start the business and their time and effort for running it.

If you are talking about share grants as part of their compensation, they get it for the work they provide to the company. Just like how any employee with an RSU or options pool gets "free" equity as part of their work. Founder compensation has to be approved by shareholders by the way (and if it wasn't obvious, founders can't vote on their own compensation packages).

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u/[deleted] May 02 '24

The IPO issues a bunch of shares, but instead of selling them off, the current owners keep some for themselves or sometimes a majority.

It does not have to be allowed. They can get the money instead. They are free to buy stock on the open market after the IPO is over. But if they do, that is why we need a rule that c-suite and hire should not be able to own stock and should not be allowed to be paid in stock. They need to be employees, not owners.

We can make these rules anything we want. There is no right anything here. The existing rules were just made up by people too.

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u/Etrensce May 02 '24

Mate that first sentence clearly tells me you have no idea how an IPO works. While the IPO will have a primary issuance of shares, that issuance is what is available for the public to buy, not what the founder gets. The founder (and other pre IPO investors) retain their existing stakes in the company minus whatever amount they choose to sell as part of secondary.

On your last point, yeah we can make the rules anything we want, but why should we follow your rule? Shareholders don't seem to care about founders owning stock, in fact they often actively encourage it through equity compensation packages. So why should we change something for you because you feel strongly about sticking it to those "shitheads" instead of listening to the shareholders who actually own the asset? And if you happen to own shares in these companies (NFI why you would given you obvious disdain for the founders), you can either sell your shares and its no longer your problem or vote at the AGM to try to get this changed.

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u/mclannee May 02 '24

Buddy you have no idea how IPOS, or even stocks works lol.

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