Is Elon Musk worth Tesla’s £44bn pay package?

By Zoe Kleinman, technology editor

Getty Images Elon Musk laughs during an interview.  His palms are together in a prayer position.fake images

Elon Musk could, once again, get his way.

His pay deal with Tesla, valued at up to $56bn (£44bn) depending on the company’s share price, which has now been backed by shareholders represents 75% of total spending on schools in England in 2024-2025 (£60bn) and around a quarter of the NHS budget (£192bn).

To his many admirers, Musk is worth every penny he receives.

His businesses include Tesla, Space X, X (formerly Twitter), Starlink, Neuralink and X.ai, his latest AI project.

You could argue that Tesla opened the US market for electric vehicles, SpaceX just sent the world’s most powerful rocket into space, and a man who volunteered to be the first human to have a Neuralink microchip implanted in his brain can now control a computer. using his thoughts.

Today, the $56 billion question is: would this portfolio have been as successful without him?

Tesla’s growth

You could say that Musk’s pay deal was actually about getting him to stay at Tesla.

Before 2018, when the company’s board of directors agreed, there had been speculation about his future at the electric car manufacturer.

The deal was structured in such a way that if Musk did not reach certain milestones (such as Tesla’s market value, sales and underlying earnings) he would not receive any payment.

Although, at the time, he was barely digging for loose change on the back of the couch given that he was worth nearly $20 billion, according to Forbes magazine’s 2018 rich list.

But if he managed to hit certain targets, the payout potential was astronomical.

To be fair, Musk has achieved the goals set for him. For example, Tesla’s market value had risen from $54 billion to the $650 billion target set in the original deal.

It has since fallen again to $570 billion.

musk profile

When Tesla faltered in 2022, it was said to be because Musk had taken his eye off the ball to focus on X, so it was his absence rather than his presence that caused the problem.

However, his profile clearly adds enormous value to these companies.

Musk doesn’t believe in communication teams and prefers to broadcast prolifically to his 187 million followers directly on his social network.

If you have Mr. Musk on your side, your PR works itself out, with mixed but always high-profile results.

He generates endless global news headlines from behind his keyboard, and you could argue that very, very few people have that power: publicity that money can’t buy.

He also has enormous political influence: he has met with several world leaders, including Chinese President Xi Jinping. He claims to have spoken by phone with Russian President Vladimir Putin and once livestreamed a conversation with Israeli Prime Minister Benjamin Netanyahu.

He is a fierce and demanding boss, a workaholic who won’t take no for an answer. Former employees say that even the most dedicated ones burn out, while he doesn’t.

Dolly Singh, who worked at SpaceX for Musk between 2008 and 2013, previously told BBC News he was an “incredible leader.”

“If that weren’t the case, he wouldn’t be achieving the things he is,” he said in 2022.

But he also admitted that working for him was “exhausting.”

Risky business

Although shareholders backed Musk’s pay package, legal experts say it’s unclear whether the court that blocked the deal will accept the new vote and allow the company to restore his pay.

But former Tesla backer Steve Westly told the BBC earlier this year that keeping Musk around is not a necessity.

“Elon is a unique visionary… but I don’t know if that means he’s essential to running any or all of those companies today,” he said.

“No one stays at the top forever, especially when you’re trying to lead seven companies at once.”

And for all of Musk’s successes, there have also been failures.

For years, Tesla made no profits, then a tweet about taking the company private sparked financial chaos, ending in an investigation by regulators that led to his resignation as CEO.

I’ve spoken to two former employees who claim that speaking out about safety concerns at Tesla cost them both their jobs and their professional reputations.

Tesla was about to go bankrupt. Not all SpaceX rocket launches work, and each failure costs the company millions of dollars. The Neuralink chip began to malfunction shortly after its implementation, although it has since been fixed.

Musk recently claimed that Starlink is now out of financial expenses, but Bloomberg published a report suggesting that he had underestimated the enormous cost of launching its satellite network infrastructure.

But the United States has a different view on risky business.

“The American market is not only huge, but it is also more predisposed to making important decisions,” Mustafa Suleyman, co-founder of Google DeepMind and who has just joined Microsoft, told the BBC.

The UK could do with being “more tolerant and celebrating failure more”, he added.

If Musk has been hurt by the failure, he doesn’t show it. Outwardly he is loud, dominant and defiant.

Today he says he sent a pie to Delaware, which tried to block his $56 billion payment deal with Tesla.

It is adorned with his favorite phrase “vox populei, vox dei” – the voice of the people is the voice of God.

Additional reporting by Dearbail Jordan.

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