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Tesla paid Elon Musk millions for 90 days’ indemnification insurance



Tesla CEO Elon Musk gestures as he arrives to visit the construction site of the future US electric car giant Tesla, on September 03, 2020 in Gruenheide near Berlin.

Odd Andersen | AFP | Getty Images

Tesla paid CEO Elon Musk $3 million personally for 90 days worth of an important type of business insurance that indemnifies directors and officers of the company from certain legal expenses, a new filing revealed Wednesday. Tesla has also ended that controversial arrangement, and obtained a more traditional form of this insurance, the filing said.

In April this year, Tesla told shareholders that they would forego directors and officers liability insurance (also known as D&O) for a year. Instead, they would pay and rely on Musk personally to cover any company or board members’ costs for legal defenses, settlements, or judgments against them.

At the time, Tesla said in a filing that it was taking this approach because premiums were “disproportionately high.”

But it’s a highly unusual move that could have created conflicts of interest, according to legal experts.

Proxy adviser Glass Lewis opposed re-election of Tesla’s chairwoman Robyn Denholm and plan to ditch third-party D&O insurance in response. Once Tesla’s board said they would try to replace their earlier liability insurance policy, Glass Lewis approved her.

‘Highly unusual’

The filing said that as of June 2020, Musk and Tesla had a deal for him to provide D&O “indemnity coverage,” up to a total of $100 million, for a 90-day term. In general, indemnity coverage protects a company, its board members and executive officers from having to pay for their own defense, settlements or judgments against them, when they face costly lawsuits.

Tesla is facing high-stakes lawsuits over various issues, including the long-term performance of batteries in its cars and its decision to acquire solar energy provider SolarCity.

In return, the filing says, Tesla “agreed to pay our CEO a total of $3 million,” a rate it said was based on a “market-based premium” as prorated for 90 days then discounted by half. (Earlier, the company disclosed it would pay Musk at least $1 million for the D&O coverage.)

That agreement has ended, and Tesla said it has “instead bound a customary directors’ and officers’ liability insurance policy with third-party carriers.” The company did not specify which carriers its board members are covered by at this point, and did not state the rate it is paying for the D&O policy moving forward.

The move had the potential to create conflicts of interest between Musk and the board that’s supposed to oversee him.

“It is highly unusual to replace a directors’ and officers’ insurance policy with a personal guaranty from an officer for any period of time, ” said Kevin Hirzel, the managing member of Hirzel Law in Detroit. “If the CEO is guaranteeing payment under the indemnification agreement, it leads to potential conflicts of interest and threatens the independence of the board of directors.”

Hirzel added, “Tesla’s board did the right thing in obtaining a traditional directors’ and officers’ liability insurance policy from a third-party insurer.”

Charles Elson, a professor of corporate governance at University of Delaware, agreed it’s a good thing Tesla has returned to third parties to cover directors and officers.  

“I don’t think that it was advisable for the chief executive officer of the company to indemnify the company and directors. It linked the directors too closely to the CEO because of that relationship. The CEO is an individual over whom the board has authority. And such a linkage would make it more difficult for board members to exercise good oversight on behalf of all shareholders.”

Elson notes that a $3 million dollar payment for $100 million dollars’ worth of insurance is not an insignificant sum. Moving forward, he suggested, Tesla should be able to demonstrate that they sought other quotes for that interim period, that the amount they paid to the CEO was fair, and explain in more detail why they weren’t able to get third-party coverage sooner.

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OANN suspended from YouTube after promoting a sham cure for Covid-19 | YouTube




YouTube has suspended the conservative news outlet One America News Network from posting new videos for a week and from making money off of its existing videos after it promoted a sham cure for Covid-19.

The video was removed under YouTube’s policies to prevent the spread of Covid-19 misinformation, which prohibit saying there is a guaranteed cure to the virus. OANN has been suspended for “repeated violations” of this policy, said YouTube spokesperson Ivy Choi.

“Since early in this pandemic, we’ve worked to prevent the spread of harmful misinformation associated with Covid-19 on YouTube,” Choi said.

YouTube’s Covid-specific misinformation policies prohibit content that disputes the existence of the virus, discourages someone from seeking medical treatment for Covid, disputes guidance from local health authorities on the pandemic, or offers unsubstantiated medical advice or treatment.

Under these policies, an offending account will receive one warning for posting misinformation and then three strikes before it is permanently removed from the platform. The strikes carry progressively more severe penalties, including de-monetization. OANN previously received a warning for “similarly violating our Covid-19 misinformation policy,” according to YouTube.

The company said it has manually reviewed and removed 200,000 videos related to dangerous or misleading Covid-19 information since February 2020, including for example a widely condemned viral video published by rightwing media outlet Breitbart featuring dubious claims from people identifying themselves as doctors, telling people not to wear masks.

While the suspension from posting new videos is temporary, YouTube says the de-monitization of all OANN content will be permanent, unless the network addresses its issues.

Tuesday’s removal comes after four Democratic senators sent a letter Tuesday to YouTube’s chief executive officer, Susan Wojcicki, pressing the company to do more to crack down on election-related misinformation.

Meanwhile, after breaking with longtime ally Fox News, Donald Trump has urged his supporters to turn to news outlets such as Newsmax and OANN. These outlets openly support Trump and, without evidence, cast doubt on the validity of the election of Joe Biden. YouTube said it does not consider OANN an “authoritative news source”, meaning under its policies the account will not surface high up in search results for broad queries about Covid-19 nor be promoted in recommendations.

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HP (HPQ) earnings Q4 2020




Enrique Lores, CEO, HP

Scott Mlyn | CNBC

HP shares rose as much as 9% in extended trading on Tuesday after the PC maker reported fiscal fourth-quarter earnings that beat analysts’ estimates and provided an optimistic earnings forecast.

  • Earnings: 62 cents per share, adjusted, vs. 52 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $15.3 billion vs. $14.7 billion as expected by analysts, according to Refinitiv.

Revenue declined for the fourth consecutive quarter on an annualized basis. It fell about 1% in the quarter, which ended on Oct. 31, according to a statement.

HP is forecasting 64 cents to 70 cents in adjusted earnings per share in the fiscal first quarter, higher than the Refinitiv consensus of 54 cents.

The company’s largest business segment, Personal Systems, which includes PC notebooks and desktops, delivered $10.4 billion in revenue, flat year over year and below the $10.5 billion consensus among analysts polled by FactSet. Within that unit, sales of notebooks rose 18% to $7.41 billion, but the overall segment was pulled down by desktop and workstation declines.

HP more than doubled unit sales of and revenue from Chromebook PCs running Google’s Chrome OS operating system, said Marie Myers, HP’s chief transformation officer and acting chief financial officer, on a conference call with analysts. She replaced Steve Fieler, who left in the quarter to join Google.

Also on Tuesday, PC maker Dell reported fiscal third-quarter results and said sales of consumer devices, including PCs, were up 14% from a year earlier in the quarter that ended on Oct. 30.

Excluding the after-hours jump, HP shares are up 6% since the start of the year, while the S&P 500 has gained about 13% over the same period.

This is breaking news. Please check back for updates.

WATCH: Cramer breaks down the runs in housing, work-from-home and cloud stocks

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YouTube suspends OANN for a week after it posted fake Covid-19 cure




The logo of video-sharing website YouTube is displayed on a smartphone on November 19, 2018 in Berlin, Germany.

Thomas Trutschel | Photothek via Getty Images

YouTube on Tuesday barred One America News Network (OANN) from posting new videos and livestreaming for one week, after the right-leaning media organization uploaded a fake cure for the coronavirus.

“After careful review, we removed a video from OANN and issued a strike on the channel for violating our COVID-19 misinformation policy, which prohibits content claiming there’s a guaranteed cure,” a YouTube spokesperson told CNBC. “Additionally, due to repeated violations of our Covid-19 misinformation policy and other channel monetization policies, we’ve suspended the channel from the YouTube Partner Program and as a result, its monetization on YouTube.

It was unclear what specifically OANN’s video said about a Covid-19 cure that made YouTube decide to suspend the channel.

The organization will have to reapply to YouTube’s Partner Program (YPP) if it wants the ability to make money off of its existing content again. YPP is YouTube’s program that connects large YouTube channels with advertisers. YouTube said broadly that companies will only be readmitted after they’ve fixed the issues that led to suspension.

Tuesday’s move marks YouTube’s largest crackdown against OANN. The social media giant has been criticized for allowing OANN to spread misinformation, such as false claims that President Donald Trump won the Presidential election.

Axios first reported on YouTube’s suspension of OANN.

A representative from OANN could not immediately be reached for comment.

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