These days, it’s hard to separate the real from the noise, as Elon Musk, Tesla’s CEO, is dominating news cycles. His proposed pay package, which includes cash and shares, could balloon to a jawdropping $1 trillion if he achieves the company’s lofty goals. We’ve seen this proposal carry out with a compelling debate about the merits. Musk’s years-long political commentary and activism has not only cost Tesla contract customers, it has led to protests of Musk outside of Tesla showrooms.
The listed pay for Musk is as ambitious as his plans to colonize Mars. To be eligible for this exceptional benefit, he must manage the delivery of 20 million Tesla vehicles. Beyond transforming the agency, he has to deliver one million robots. These goals, ambitious as they are, mirror Musk’s bold and innovative vision for the future of technology and transportation. They raise important questions about the feasibility of those targets. Is anyone, even Musk, truly worth $1 trillion?
Though he’s faced immense criticism from all sides, Musk has continued to speak his mind on the political directions that he’s taken. His alignment with controversial figures, including former President Donald Trump, has alienated some customers who are critical of his stance. The protests outside Tesla showrooms have become a bright red car in the rearview mirror of his recently acquired political endeavors.
“Tesla without Musk is like pizza without cheese.” – Elon Musk
Analysts split on Musk’s worth to Tesla Dan Ives, a well-known financial analyst, goes so far as to compare Musk to iconic innovators such as Albert Einstein and Thomas Edison. He argues Musk’s rare talents excuse the company’s extreme dependence on him. As Ives puts it, “There’s edgy behaviour, there’s haters, but people love haters. And that’s why he is the most successful entrepreneur in the world. His understanding humanizes the complexity of Musk’s public-facing worldview—though he is a master at riling up the crowd, he has his fans in the ether.
Despite the PR wins, there is continuing worry about the ways that Musk’s foray into politics could affect Tesla’s brand reputation and retail performance. Stephanie Valdez Streaty, a market analyst, expressed her hope that Musk would focus primarily on Tesla’s business objectives moving forward. “I’m hoping that based on his experience with getting politically involved and how that really hurt some of his brand and sales that he has learned to really focus on this business,” she stated.
Still, the proposed compensation package is full of pitfalls. If intervening events hinder Musk from reaching the set goals, experts note that Tesla’s board could still deem those targets met. Corporate governance expert Ann Lipton was the first to flag this alarming possibility. She proposed that Musk’s pay conditions could provide flexibility even in surprise emergencies.
Musk’s dream is not just limited to Earth. He sees futures that might one day involve colonizing Mars. This expansive thinking contributes to the “Musk premium,” a perception that around one-third of Tesla’s market value is directly attributable to Musk himself. His willingness to Duke Energy to defy industry accepted limits has made him a catalyst for innovation and shareholder return.
If Musk does succeed in achieving the goals laid out above, he will go on to unlock trillions of dollars in shareholder value. His volatile personality makes it hard to predict whether he will be a distraction with more damaging, anti-Tesla adventures. Some industry observers have raised doubts that his involvement in all of these other projects might be a diversion from his Tesla focus.
“Does it help sell cars in Europe? No. But does it help Tesla win the AI race? Yes.” – Dan Ives
The combination of Musk’s visionary leadership and contentious political involvement paints a complex picture for Tesla’s future. There is widespread gratitude amongst automotive enthusiasts for everything he did for both Tesla, as well as the industry as a whole. His political affiliations make backlash that clouds his relationship with consumers.