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Tesla is reportedly under investigation by the DOJ and SEC over it's mysterious 'Project 42' (www.businessinsider.com)

submitted 1 year ago by [email protected] to c/[email protected]

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Tesla is reportedly under investigation by the DOJ and SEC over it's mysterious 'Project 42'::The project was internally believed to involve building a glass house for Elon Musk, the Journal previously reported.

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[–] [email protected] 28 points 1 year ago (1 children)

Got it in two. Both, per the article:

It can be illegal to use company funds for personal expenses — especially when dealing with a publicly traded company. If a public company were found to have used company funds for an executive's personal use it could lead to an IRS investigation and lawsuits from shareholders.

Elon doesn't own all of Tesla. It's a publicly traded company whose shares are held by millions(?) of people. The board and CEO are generally required to act in those owners' best interests, not their own. They have leeway, but building the CEO a house is a lot closer to embezzlement (taking company funds for personal gain) than say a PR stunt. Board/CEO remuneration is fairly carefully controlled to avoid this kind of thing.

As for tax, it looks like the US is a bit more lax with fringe benefit tax than other jurisdictions, but it could nonetheless apply.

[–] [email protected] 2 points 1 year ago (2 children)

So if he were to give himself a bonus and use that money to build the house would it still be illegal? Genuinely asking

[–] [email protected] 11 points 1 year ago

No CEO of a public company has the power to just "give himself a bonus" if the sum is to be any more than pocket money. The board has to approve it.

[–] [email protected] 6 points 1 year ago

The board would need to approve of that bonus, and in turn the board is accountable to shareholders. If a CEO starts using a public company as a personal piggy bank, shareholders have grounds to sue.