Much is being made of a Delaware court blocking Musk’s $50 billion compensation contract. See the reporting in the NYTimes: Elon Musk’s Tesla Pay Package Is Voided by Judge.
The court found that the compensation was set by a Board of Directors of Tesla who are in Musk’s pocket.
“The process leading to the approval of Musk’s compensation plan was deeply flawed. Musk had extensive ties with the persons tasked with negotiating on Tesla’s behalf. He had a 15-year relationship with the compensation committee chair, Ira Ehrenpreis. The other compensation committee member placed on the working group, Antonio Gracias, had business relationships with Musk dating back over 20 years, as well as the sort of personal relationship that had him vacationing with Musk’s family on a regular basis. The working group included management members who were beholden to Musk, such as General Counsel Todd Maron who was Musk’s former divorce attorney and whose admiration for Musk moved him to tears during his deposition. In fact, Maron was a primary go-between Musk and the committee, and it is unclear on whose side Maron viewed himself. The plan was by far the largest compensation package in the history of publicly traded corporations in the US.”1
The court also noted the outsized value of the compensation plan. Largest by far for any CEO of a publicly traded US corporation.
But, in the last 50 years we have seen corporate chieftains raise their pay through exactly the same cozy relationship with boards of directors and compensation consultants. 
What is missing here?
This discussion of CEO pay is fine as far as it goes. The practices that are commonplace in setting CEO compensation plans are egregiously fraught with self-dealing and cozy insider relationships. That is bad enough, but far worse is that this is just a symptom of the transformation of corporations during this period.
From Stewardship to Financialization – from Production to Extraction
If you observed the behavior of top management in large corporations in the 1950s, you would see that their concerns included new product and service development to compete better to sustain profits, and keeping the workforce happy and engaged. The general mantra was that if you looked after these basics, sales and profits would follow. You would also note that typical CEOs made 15 to 20 times the base wages of their employees. Not 350 times!!
In the 1970s a new theory of the purpose of a corporation came into play – Shareholder Value Maximization.
Viewed from the perspective of the objectives and tools displayed in The Financialization of Corporations, above CEO compensation is just part of what has happened over the past 50 years. This has produced mega-global corporations. Really global monopolies in most major markets. They are not beholden in any meaningful way to any nation-state. They treat workers as replaceable cogs to be called at will and dismissed at will. Workforce discipline is maintained by a fierce campaign of anti-union measures. Globalization reduced their wage costs enormously and set the stage for a 40-year stagnation of wages for the bottom 80% of the US population.
All of this is a component of the neoliberal enterprise of the past 50 years – the most successful social movement of the last hundred years. More from me about neoliberalism here – About Neoliberalism
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