What’s the true worth of success in business? That’s the question Scotland’s top entrepreneurs have been debating after a Delaware judge ruled against Elon Musk’s ‘excessive’ $55 billion pay plan . . . while Labour vowed not to reintroduce the cap on bankers’ bonuses.
Speaking on their Go Radio Business Show, Sir Tom Hunter said: “When people see Elon Musk’s pay packet has been cut by $55 billion, I don’t think many will say: ‘Oh, that’s not fair!’
“But here are some of the facts. This was agreed in 2018 by the board of directors of Tesla when the market cap of Tesla was about $60 billion. As its CEO, Musk said: ‘If I can get this company to be 10 times that worth, so $600 billion, I just want less than 10 % of it.’
“That’s not a bad deal because the shareholders will have made 10 times their money during that time.
“However, a few of them took it to court in Delaware, where he came up against the same judge who made him buy Twitter, Judge Kathleen McCormick. So he was up against a very feisty judge.
“So as ever the headlines are one thing, but the facts are another.”
Asked by Sir Tom whether anyone was ever worth $55 billion, his co-host Lord Willie Haughey said: “No, I don’t. What this demonstrates is the power of a shareholder.”
Sir Tom countered: “Well, we’re going to have to disagree. If a company I’m involved with gives me 10 times my investment, I’m willing to give the super-founder less than 10 % of that.”
Lord Haughey noted: “To this point about paying people accordingly, I see Labour Shadow Chancellor Rachel Reeves is saying they would not reinstate the cap on bankers’ bonuses, if elected. Now this is a big switch. I think it’s great and it’s welcome.”
Sir Tom agreed, adding: “If someone is making a difference in a business, they should be paid accordingly.
“Labour has been quite savvy here. I believe this is Labour trying to say: ‘We’re cuddly, we’re friendly to business, vote for us!’.”
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