Tech Policy, CEO Compensation & Capital Allocation Principles

Performance-based packages should align extreme upside only with extreme shareholder value creation.

Elon's 2018 Tesla package paid nothing unless market cap doubled and revenue/profit milestones were hit, making it impossible to game through financial engineering alone.

Why: Traditional EPS-linked bonuses can be manipulated through debt-funded buybacks, while pure performance hurdles force real operational excellence.

"Elon had the confidence in himself to deliver the crazy outcome. Nobody was really complaining about this until... this small shareholder"

Industries that over-earn for long periods attract litigation finance and regulatory clawback mechanisms.

The trial bar sees social media and big tech as the next tobacco/pharma-scale profit pool, using emotional child-safety cases to rewrite Section 230 liability.

Why: Capitalism self-corrects excess returns through legal and political channels when economic competition fails.

"There's an element of American capitalism that takes companies through seasons... when you are over earning for a long time, the machinery of the economy comes and kind of pulls you back down to earth"

At internet scale, even 0.1% error rates produce millions of 'unintended consequences' that appear systemic.

With 3.5B monthly users, a 0.1% failure rate equals 3.5M edge cases—enough to fuel perpetual moral panic and litigation.

Why: Human perception of harm scales with absolute numbers, not percentages, making large platforms perpetually vulnerable.

"Even if you say that there's one tenth of one percent of an error rate... that's three million unintended consequences"

Delaware's predictability is eroding as courts substitute political preferences for shareholder sovereignty.

The Tesla ruling voided a 73% shareholder-approved package based on judicial hindsight about 'fair process', undermining Delaware's historical governance advantage.

Why: When courts override informed shareholder votes, they destroy the state's competitive moat for incorporation.

"It sets a very poor standard for why anybody should actually build a company governed in Delaware"

Most CEO pay packages incentivize financial engineering over operational excellence.

EPS targets are routinely hit through debt-funded buybacks that increase leverage without improving underlying business performance.

Why: Traditional metrics reward short-term financial manipulation while punishing long-term risky innovation.

"All the returns... it's all driven by share buybacks. This is an artificial gamesmanship of performance"

Device-level age gating is more practical than platform-level enforcement for social media access.

Zuckerberg suggested Apple/Google should handle age verification via device ownership and payment credentials, rather than Meta policing millions of accounts.

Why: Centralizing verification at the OS level reduces compliance costs and leverages existing parental control infrastructure.

"Mark at some point in there basically said, well, listen, let's look at Apple and Google. We should expect them to do the actual age verification, not us"

Emotional harm cases (suicide, exploitation) create asymmetric legal risk that favors plaintiffs regardless of actual causation.

Trial lawyers specialize in finding social media breadcrumbs to blame platforms for complex societal harms, with litigation finance backing the probabilistic returns.

Why: Juries award based on sympathy for victims, not statistical causation, making these cases high-probability wins regardless of merit.

"These are highly kinetic issues... bringing these to jury trials all across the United States, I think that they probably think that they're on the right side of history in winning those things"

Repealing Section 230 would paradoxically increase censorship while failing to address root causes of harm.

Without liability protection, platforms would over-censor to avoid lawsuits, disproportionately affecting conservative content given moderator demographics.

Why: Corporate risk aversion leads to maximum content removal, and liberal-leaning moderation teams would target right-leaning speech as highest-risk.

"What's going to happen is that these companies... are going to clamp down even more... they're going to take down Republican stuff even more"