Even Elon Musk Wants More Power - WSJ - 0 views
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the past few weeks might well live on as a business-school case study on the complexity of managing a superstar talent who has succeeded with maverick ways but also, for some, can go too far
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Just as it isn’t easy for a manager to course-correct a star performer who gets out of line, a board can struggle to rein in a celebrity CEO, especially if everyone is enjoying the company’s stock performance that papers over troubling signs.
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At present, Musk directly holds 13% of Tesla shares, or about 21% if including unexercised options, according to the company’s most recent regulatory filing. That’s down from 21% directly held at the end of 2016.
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That plan, which became subject to litigation, set numerous stretch goals, including the addition of $600 billion to the company’s market value. It offered him tranches of payouts along the way, giving him options in total to about 10% of the company’s stock, worth around $60 billion Friday after exercising costs.
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“If I allocate time to Tesla—if I overallocate time to Tesla at the expense of making humanity a space-faring civilization—then I’m not sure what would serve the greater good,” Musk said. “But if there were additional economic resources available that could then subsequently be applied to making life multiplanetary, then perhaps that would serve the greater good.”
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Musk surprised many by completing the final tranche of his plan in 2022—to his and investors’ benefit.
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His public airing of his demands were made even more unusual given that he and the board have plenty of reasons to make something work. His unexpected departure would hurt the stock’s value, which would be bad both for his own wealth and for the board responsible for ensuring shareholder value.
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“This is primarily about ensuring the right amount of voting influence at Tesla,” Musk tweeted. “If I have 25%, it means I am influential, but can be overridden if twice as many shareholders vote against me vs for me. At 15% or lower, the for/against ratio to override me makes a takeover by dubious interests too easy.”