Musk’s galaxy of companies is under threat as Tesla spirals. These people keep the system running.
By Dana Hull and Kurt Wagner
May 29th 2024
Tesla Inc. is a company in disarray. Layoffs are mounting. Morale is shattered. Its stock is cratering and sales are anemic. And, some investors say, it’s got a distracted leader at the helm.
Elon Musk runs five other companies in addition to the world’s largest electric car maker: SpaceX, the biggest privately held rocket and satellite provider; X, the social media site formerly known as Twitter; the Boring Co. tunnel company; brain-machine startup Neuralink; and artificial intelligence venture xAI.
Musk oversees more than 130,000 people around the world under what has morphed into Elon Inc., a shape-shifting conglomerate where few people have traditional titles but everyone knows exactly to whom they ultimately answer. While Musk burns brightly at the center of his corporate universe, a less visible coterie of consultants, fixers, board and family members orbits around him. Musk relies on this inner circle to handle urgent tasks across his stable of companies, though it’s often unclear how and when they are getting paid.
When times were good, many investors looked past the complexities of one person simultaneously running several companies. But now, there’s trouble brewing everywhere in Elon Inc. Tesla has gone from being a high-flying stock to one of the year’s worst performers. SpaceX’s Starlink business has come under scrutiny as a growing black market for its terminals takes its internet service to US foes like Sudan and Yemen. Meanwhile, Musk was recently deposed as part of an arbitration case related to Twitter layoffs.
Musk’s personal wealth dropped by roughly $27 billion this year through May 28, according to the Bloomberg Billionaires Index. He stands to lose even more of his fortune unless Tesla’s board is able to navigate its way around a judge voiding the unprecedented pay package directors arranged for him six years ago.
“It’s a very high-wire act for a part-time CEO with conflicting interests,” said Ivan Frishberg, the chief sustainability officer for Amalgamated Bank, which owns roughly 600,000 Tesla shares and recently penned a letter opposing Musk’s pay. “In the case of Tesla, the performance over the last year and the departures of key members of the executive team all suggest that this is not going to plan and that investors face increasing risk.”
The 52-year-old billionaire’s distractions are at the center of a fight for investors to re-approve his $56 billion pay package from 2018 at Tesla’s annual shareholder meeting in June. The payout was struck down in January after a Delaware Chancery Court judge ruled that the largest compensation package in US history wasn’t in the best interests of shareholders.
Musk, as well as others named in this story, didn’t respond to queries from Bloomberg.
