Elon Musk might get his way again. His Tesla pay deal, potentially worth $56bn (£44bn) based on the company’s share price, has been backed by shareholders. This amount is 75% of what England will spend on schools in 2024-25 (£60bn) and about a quarter of the NHS budget (£192bn).
Many people admire Musk and believe he’s worth every cent he gets. About 72% of the voting shareholders agreed with this pay deal. Musk’s businesses include Tesla, SpaceX, X (formerly Twitter), Starlink, Neuralink, and his new AI project, X.ai.
You could say Tesla popularized electric vehicles in the US, SpaceX launched the world’s most powerful rocket, and a person with a Neuralink microchip in their brain can now control a computer with their thoughts.
The big question today is: would these successes have happened without Elon Musk?
The Rapid Growth of Tesla
You could argue that Mr. Musk’s pay deal was primarily aimed at keeping him at Tesla.
Before 2018, when the company’s board approved it, there was uncertainty about his future at the electric car maker. The deal was set up so that if Mr. Musk didn’t meet specific targets—like Tesla’s market value, sales, and profits—he wouldn’t receive any payment.
However, he was already quite wealthy, worth nearly $20bn according to Forbes’ 2018 rich list, so he wasn’t hurting for money. But if he did achieve those goals, the potential reward was enormous.
To be fair, Mr. Musk has met the goals set for him. For instance, Tesla’s market value increased from $54bn to the targeted $650bn outlined in the original deal.
It has since decreased to $570bn.
• ‘Why I voted no on Musk pay hike’
Elon Musk’s Background
When Tesla struggled in 2022, some said it was because Elon Musk focused more on his other projects than on Tesla itself. His absence seemed to cause more problems than his presence.
However, Elon Musk brings immense value to these companies.
He doesn’t rely on PR teams. Instead, he communicates directly with his 187 million followers on social media.
Having Elon Musk on your side means your PR gets attention effortlessly, though results can be mixed, they always attract significant interest.
He constantly makes global headlines through his online presence, a power that very few people have – publicity that can’t simply be bought with money.
• Tesla investors support Elon Musk’s $56 billion pay deal.
• Musk disagrees with US tariffs on Chinese electric cars.
• A $56 billion Tesla pay deal for Elon Musk is canceled in Delaware court.
Elon Musk’s Global Influence and Leadership
Elon Musk wields significant political power, having met with numerous world leaders, including China’s President Xi Jinping. He claims to have spoken directly with Russian President Vladimir Putin and once live-streamed a conversation with Israeli Prime Minister Benjamin Netanyahu.
He is known as a tough and demanding boss, a workaholic who expects high standards. Former employees from SpaceX describe him as an “incredible leader,” acknowledging that his leadership style enables significant achievements.
However, working for him can be exhausting, with even the most dedicated employees burning out while he remains relentless in his pursuit of goals.
Navigating Risk with Elon Musk
Although shareholders supported Mr. Musk’s pay package, legal experts are unsure if the court that blocked the deal will accept a re-vote to restore his pay.
Former Tesla supporter Steve Westly said this year that keeping Musk isn’t a must.
“Elon is a unique visionary … but it’s unclear if he’s essential to run any or all of those companies today,” he said.
“No one stays on top forever, especially when managing seven companies simultaneously.”
Despite Mr. Musk’s successes, there have also been failures.
The Risks and Challenges of Elon Musk’s Ventures
For years, Tesla struggled to make any profit. A tweet about taking Tesla private caused financial chaos and led to investigations, resulting in Musk stepping down as CEO temporarily.
Two former employees lost their jobs and reputations for speaking out about safety concerns at Tesla.
Tesla faced bankruptcy at one point. SpaceX has experienced failures in rocket launches, each costing millions. The Neuralink chip had initial malfunctions that have since been resolved.
Recently, Musk claimed Starlink broke even financially, but reports suggest launching its satellite network was much costlier than stated.
The US views risky businesses differently.
Embracing Risk and Resilience in the US Market
Mustafa Suleyman, co-founder of Google DeepMind and newly joined Microsoft, highlighted the immense size and bold nature of the US market. He emphasized its willingness to take significant risks.
[…] Tesla aims to create an “autonomous humanoid robot” to handle dangerous, repetitive, or dull tasks. Musk has mentioned that these robots are intended to be mass-produced and sold for under $20,000 each. While Musk is known for setting ambitious timelines, he hasn’t always met them in the past. […]