Elon Musk Might Not Be the Business Genius We Thought He Was

by | Nov 28, 2022 | Opinions & Commentary

Elon Musk is the founder, CEO, CTO, and chief designer of SpaceX; early investor, CEO, and product architect of Tesla, Inc.; founder of The Boring Company; co-founder of Neuralink; and co-founder and initial co-chairman of OpenAI. Musk is one of the richest people in the world. Image: DonkeyHotey, Wiki Commons

Elon Musk Might Not Be the Business Genius We Thought He Was

by | Nov 28, 2022 | Opinions & Commentary

Elon Musk is the founder, CEO, CTO, and chief designer of SpaceX; early investor, CEO, and product architect of Tesla, Inc.; founder of The Boring Company; co-founder of Neuralink; and co-founder and initial co-chairman of OpenAI. Musk is one of the richest people in the world. Image: DonkeyHotey, Wiki Commons
As Twitter implodes under Elon Musk’s rule, a lawsuit argues Tesla is vastly overpaying the world’s richest man.

A good day’s work for a good day’s pay. Should this age-old wisdom apply to overpaid CEOs as well as their workers? A Delaware court will soon decide, a turn of events that must have the richest man in the known universe, Elon Musk, feeling more than a little bit uneasy.

Delaware’s little-known Court of Chancery normally provides business moguls a battleground where they can slug out their big-ticket differences. But the court also gives stockholders a chance to push back against the moguls—and one modest shareholder in the Musk empire has done just that.

Shareholder Richard Tornetta, a former heavy metal drummer, filed suit in 2018 against the company’s board for lavishing unnecessary billions upon Musk.

Tornetta’s challenge has ended up before the Chancery Court’s Kathleen McCormick, a judge who’s already demonstrated a distinct lack of patience with Muskian antics. Just this past October, McCormick ruled against Musk in another case. She might well again.

Musk’s current Tesla CEO pay plan, notes CNN Business, gives Musk “the largest compensation package for anyone on Earth from a publicly traded company.” Under the plan, the higher Tesla’s share price goes, the more new Tesla shares Musk gets.

Thanks to that connection, Musk’s personal net worth now sits at $189 billion, the world’s largest personal fortune. In 2018, the year Musk’s Tesla pay deal went into effect, some 40 billionaires worldwide topped Musk on the Bloomberg billionaire charts.

Back in 2018, major shareholder advisory firms recommended that Tesla shareholders reject the pay deal that Tesla’s corporate board—a panel that included Musk’s brother and assorted close pals—wanted to give Musk.

Musk himself, one advisory firm noted, already had plenty of incentive to work hard for Tesla’s success. He owned 22 percent of Tesla’s shares even before his new CEO pay deal.

The week-long trial on Richard Tornetta’s Delaware lawsuit against Musk and Tesla ended in mid-November. Judge McCormick’s decision in the case will likely come down sometime over the next three months.

McCormick’s previous ruling against Musk came when the billionaire tried to back out of the deal he cut last spring to buy Twitter. After that ruling, Musk had to go ahead with the purchase. Now he’s flailing about, trying to make others pay the price for his impulsive takeover bid. He’s already laid off half the Twitter workforce.

If McCormick rules against Musk once again, Musk will still walk away fantastically rich. But he won’t walk away happy. His ongoing Twitter debacle—and now the Tesla litigation—have dealt his reputation for unparalleled business “genius” a potentially fatal blow.

Under cross-examination in the Tesla case, for instance, Musk had to concede that he didn’t come up with the original vision for Tesla himself, the claim he’s been making for years.

Musk turns out to be as flawed as the rest of us. The key difference: Musk has the power and wealth to make others pay for his mistakes.

Musk has also benefited, unlike the rest of us, from billions in taxpayer subsidies. Handouts to his electric car, solar panel, and spaceflight businesses—all “long-shot start-ups,” the Los Angeles Times has detailed—gave his companies their secret sauce. Those subsidies launched Musk’s unparalleled personal fortune.

So what can the rest of us do to prevent another “brilliant” entrepreneur from building a fortune off the insights, labor, and tax dollars of others? We can deny subsidies to companies that pay their top execs hundreds of times more than what they pay their workers. We can tax the rich at much higher rates.

And we can put Elon Musk atop a rocket and send him off to where he has repeatedly announced he dearly wants to go—to Mars.

Republished with permission from OtherWords, by Sam Pizzigati

OtherWords — Institute for Policy Studies

OtherWords — Institute for Policy Studies

OtherWords is a free editorial service published by the Institute for Policy Studies. Each week, we publish a package of op-eds and columns, plus an original cartoon, and distribute them to readers, editors, and publishers through our website and newsletter. Each year, hundreds of newspapers and websites reaching millions of readers use this work.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Follow Us

Related Articles

Feb 04 2023

Fear, Terror and Paranoia: Understanding the Mindset of the Far-Right

The paranoia-terror coffee klatch of the far-right thinks every random thought is a “fact.” And by this they tip their hand as to their real mindset—they...
grayscale photography of a man standing in front of a Jesus graffiti
Feb 04 2023

Michael Bounces on Jesus: A Heavenly Parable

Michael dies. Michael goes to Heaven and meets Jesus. Michael reality-checks Jesus…
Feb 02 2023

The Ambition of Ron DeSantis: Big Brother, Fahrenheit 451 or Both?

Ron DeSantis has pushed for a curriculum that whitewashes—irony intended—the vast history of oppression of black members of American society throughout our...
Feb 01 2023

A Reality Check on the GOP Promise to Balance the Federal Budget

A quick look back at how we briefly balanced the budget twenty years ago, along with how much has changed, shows that Republicans are unlikely to manage a similar...
Jan 30 2023

Yes, White Supremacy Killed Tyre Nichols

When black officers pulled Tyre Nichols over, they did so as representatives of a faulty apparatus, one that has for decades perpetuated the message that black people...
Jan 28 2023

Old-Timey Yellow Journalism Is Alive and Well at FOX “News”

We generally think of yellow journalism as a revenue driver, with click bait titles, loosely-researched or fully fabricated facts presented as gospel. But the same...
Jan 27 2023

Trump’s Return to Facebook and Twitter Might Be More His Problem Than Ours

Perhaps the more important fact about Trump’s anticipated return to Twitter and Facebook is that he now owns a competing social media platform. The implications...
Jan 22 2023

A Review of Today’s Republican Party: Bring in the Malignant Clowns

The Republican Party’s dubious hallmark is willed stupidity super-glued to shameless hypocrisy: They want to cut a bedrock social programs despite the fact that...
Jan 20 2023

An Open Letter to the Department of Justice: Act Now to Remove Insurrectionists from Congress

The very ability of our government to function on our behalf is being held hostage by insurrectionists in Congress and the ransom is unacceptable. Where is the...
Jan 15 2023

Transfer of Power: The Constitutional Crisis of 1801

As a country, we don’t remember what happened 222 years ago, because we tend not to remember history. But also because that political storm “rolled harmlessly away.”...
Subscribe for Updates!

Subscribe for Updates!

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!

Pin It on Pinterest

Share This