In my days as a securities and corporate governance lawyer I often worked with the kind of executive compensation arrangements that will be at issue in Musk’s quarrel with the former Twitter executive officers whom he claims to have fired “for cause.” If you take a look at Twitter’s Change Of Control And Involuntary Termination Protection Policy (as supplemented and modified by their respective offer letters, this is Twitter’s version of a “golden parachute”) (available on the SEC’s website (https://www.sec.gov/Archives/edgar/data/1418091/000156459014003474/twtr-ex10_20140630634.htm), you will see that “Cause” is a defined term, and a narrowly defined defined term at that, to the benefit of the executive officer participant.
This is by design: these plans are intended to preclude exactly what Musk is trying to pull here. In fact, the “strategy,” if you can call it that, that he is starting to follow here is strikingly similar to that employed in the Delaware Chancery case relating to the merger agreement, and has many of the same problems.
Under the terms of the merger agreement, these people would be entitled to receive the merger consideration in exchange for their Twitter shares. Additionally, the golden parachutes would automatically vest, and cash out, at maximum targeted payouts where applicable, all their unvested equity awards and unearned salary, bonus and other cash incentive compensation. This may well amount to several years’ worth of max compensation.
They get all of these goodies unless Musk can prevail on his claim to have fired them for cause. Unless there are some unknown bad facts concerning the executives, this is quite unlikely.
I haven’t chased it down through the documents, but these kinds of executive compensation arrangements would typically also provide that Twitter would have to pay the executives’ legal and other costs incurred in enforcing their rights against Twitter. They may even be entitled to have their legal and other expenses advanced to them in the course of the litigation. Thus, ultimately, it will not necessarily be the case that the executives will be significantly out of pocket at all when the dust settles.
It’s really a Trumpian strategy. At best, the executives may be persuaded to accept less than their due in order to shorten their journey through the litigation mill.
Dear Brad, Some info on specific performance from a civil procedure teacher. You can only get specific performance (and equitable remedies in general)
if you can show no adequate remedy at law (or irreparable injury, which amounts to same thing). This been the rule for centuries.
Sales of real property, however, can be enforced by injunctions—prior to the Industrial Revolution, wealth was in land.
So how come Delaware court issued an injunction? Delaware grants injunctions freely in corporate takeover case. If the buyer was to provide synergy and special expertise, money damages would not make the target corporation whole.
Allen Kamp, Professor Emeritus, Un. Ill. Chicago Law School ( B.A. Berkeley, English, 1964)
just for fun, I went to FRED and graphed YOY % chg of GDP, PCE, CPI-U, unemployment and fed funds. I still say, "the Fed's got this" if you look pre-covid to post covid, it's like looking at tightly bound threads pre covid, a greate unraveling during and immediately after covid, and lately a slow coming together. The other thing, and I think it's BDL's book that has me thinking longer term on these things, although all of those variables unraveled in 2020, if (when) we get hit with a pandemic again, we know so much more than we knew before. A new virus may rhyme, but our response to it won't.
The 'wheels within wheels' bit about macroeconomic policymaking brings to mind the models policymakers use to understand their generally pretty chaotic environment on any subject, particularly the issue-attention cycle or the various attempts to model policymaking in general as a process with neat stages that flow one from the other (formulation-adoption-implementation-evaluation etc). I'm struggling to think of any policy process theory that doesn't imply a cycle (mostly people complain that they're too rigid and argue that you do mini-loops inside the big ones, or that it's all too chaotic to fit into a neat diagram).
It sounds like macroeconomic policy is 'developing' in the same way that education policy, or health policy, or any other big policy area develops over time - in a whirl of chaos as ideas rise and fall, with a slowly accumulating pool of reference points that people argue over and recast to fit their preferred theory, with progress always doubtful and mostly down to interpretation, etc.
Now very much looking forward to reading Blinder's book. :)
In my days as a securities and corporate governance lawyer I often worked with the kind of executive compensation arrangements that will be at issue in Musk’s quarrel with the former Twitter executive officers whom he claims to have fired “for cause.” If you take a look at Twitter’s Change Of Control And Involuntary Termination Protection Policy (as supplemented and modified by their respective offer letters, this is Twitter’s version of a “golden parachute”) (available on the SEC’s website (https://www.sec.gov/Archives/edgar/data/1418091/000156459014003474/twtr-ex10_20140630634.htm), you will see that “Cause” is a defined term, and a narrowly defined defined term at that, to the benefit of the executive officer participant.
This is by design: these plans are intended to preclude exactly what Musk is trying to pull here. In fact, the “strategy,” if you can call it that, that he is starting to follow here is strikingly similar to that employed in the Delaware Chancery case relating to the merger agreement, and has many of the same problems.
Under the terms of the merger agreement, these people would be entitled to receive the merger consideration in exchange for their Twitter shares. Additionally, the golden parachutes would automatically vest, and cash out, at maximum targeted payouts where applicable, all their unvested equity awards and unearned salary, bonus and other cash incentive compensation. This may well amount to several years’ worth of max compensation.
They get all of these goodies unless Musk can prevail on his claim to have fired them for cause. Unless there are some unknown bad facts concerning the executives, this is quite unlikely.
I haven’t chased it down through the documents, but these kinds of executive compensation arrangements would typically also provide that Twitter would have to pay the executives’ legal and other costs incurred in enforcing their rights against Twitter. They may even be entitled to have their legal and other expenses advanced to them in the course of the litigation. Thus, ultimately, it will not necessarily be the case that the executives will be significantly out of pocket at all when the dust settles.
It’s really a Trumpian strategy. At best, the executives may be persuaded to accept less than their due in order to shorten their journey through the litigation mill.
Dear Brad, Some info on specific performance from a civil procedure teacher. You can only get specific performance (and equitable remedies in general)
if you can show no adequate remedy at law (or irreparable injury, which amounts to same thing). This been the rule for centuries.
Sales of real property, however, can be enforced by injunctions—prior to the Industrial Revolution, wealth was in land.
So how come Delaware court issued an injunction? Delaware grants injunctions freely in corporate takeover case. If the buyer was to provide synergy and special expertise, money damages would not make the target corporation whole.
Allen Kamp, Professor Emeritus, Un. Ill. Chicago Law School ( B.A. Berkeley, English, 1964)
just for fun, I went to FRED and graphed YOY % chg of GDP, PCE, CPI-U, unemployment and fed funds. I still say, "the Fed's got this" if you look pre-covid to post covid, it's like looking at tightly bound threads pre covid, a greate unraveling during and immediately after covid, and lately a slow coming together. The other thing, and I think it's BDL's book that has me thinking longer term on these things, although all of those variables unraveled in 2020, if (when) we get hit with a pandemic again, we know so much more than we knew before. A new virus may rhyme, but our response to it won't.
The 'wheels within wheels' bit about macroeconomic policymaking brings to mind the models policymakers use to understand their generally pretty chaotic environment on any subject, particularly the issue-attention cycle or the various attempts to model policymaking in general as a process with neat stages that flow one from the other (formulation-adoption-implementation-evaluation etc). I'm struggling to think of any policy process theory that doesn't imply a cycle (mostly people complain that they're too rigid and argue that you do mini-loops inside the big ones, or that it's all too chaotic to fit into a neat diagram).
It sounds like macroeconomic policy is 'developing' in the same way that education policy, or health policy, or any other big policy area develops over time - in a whirl of chaos as ideas rise and fall, with a slowly accumulating pool of reference points that people argue over and recast to fit their preferred theory, with progress always doubtful and mostly down to interpretation, etc.
Now very much looking forward to reading Blinder's book. :)