Liz’s view
How do you solve a problem like Elon Musk?
Musk possesses an almost supernatural ability to conjure investor zeal and create products that redefine entire industries. But his polarizing persona overshadows the genius and genuine appeal of those products. He is both an irreplaceable asset and a clear liability, and the challenge for Tesla’s board is balancing that ledger.
Its once press-shy board chair, Robyn Denholm, has been making the rounds over the past week, defending the up-to-$1 trillion pay package awarded to the billionaire CEO. Governance scolds are appalled by the number, as is the pope.
The package actually does a good job aligning incentives. Musk gets rich, but only if his shareholders get far richer. The package’s operational milestones over the next decade — delivering 20 million cars, achieving true self-driving capability for 10 million users, and deploying 1 million robotaxis — create guardrails against quick-fix theatrics. By the conventions of the corporate-governance world, it gets a lot of things right.
Yet Musk represents something larger than a governance puzzle for Tesla. He embodies a seismic shift where power once safely housed in institutions — boards, brands, universities, regulators — now flows toward magnetic individuals who can either outshine or undermine the establishment. Musk is constantly doing both, leaving Tesla’s directors holding a tiger by the tail. (Tesla’s stock would almost certainly tank if Musk left.) It’s an expensive leash he’s on, but better than letting go.
In this article:
Room for Disagreement
“Is the guy at the helm, who has been so beneficial to this company for so many years, is he now liability for the company?” auto podcaster Doug DeMuro asked in March, strongly hinting “no” as he pointed to the desperation in Tesla’s 0% financing offers this spring when sales slipped. His co-host noted that the value of a Musk social media post, which saved Tesla millions of dollars in marketing, may be slipping.
Notable
- “There’s this perception that Tesla cannot succeed without Elon, that essentially Elon is Tesla,” investor Ross Gerber, once a prominent Tesla bull who sold his stock in May, told The Atlantic this week. “So I guess the result was, ‘Let’s just give him the whole company.’”
- Musk can’t be blamed for all of Tesla’s problems, which have been caused above all by slowing EV demand, the Financial Times’ Lex column noted in 2024.