For a man who wants to create a better future, Elon Musk seems to have been stuck in the past, and already put, in an alternative version of it. During a testimony in a shareholder lawsuit over Tesla’s purchase of SolarCity in 2016, Musk offered a version of the story that deviates from reality, and that should prompt investors.
Despite “trying very hard” not to speak as CEO, Musk said, “frankly, I have to, or Tesla will die.” That may have been true for much of its existence as a listed company, when the cult that grew up around Musk served as a counterweight to its precarious financial situation. Tesla has not left all its problems behind, but its manufacturing process is well established and has $ 17 billion in cash from the sale of shares. While the company’s skyrocketing valuation of $ 633 billion could fall if Musk left, Tesla would survive without a hitch.
His “humble swagger” in court shows that he has failed to fulfill one of the most important jobs of a CEO: grooming a successor. To be sure, the Board has some responsibility in this matter, too, but Tesla executives have a history of falling asleep behind the wheel. At the time of the SolarCity acquisition, only three of the nine directors lacked any ties to Musk. The SolarCity Board, of which he was also chairman, had only two independent directors to assess Tesla’s offer. Musk stayed out of direct negotiations, but his suggestion that the directors should consider the interests of all shareholders seems insincere. The SEC was unconvinced, and in 2018 forced Musk to step down from Tesla’s presidency and appoint two independent directors.
Next November, Tesla will be able to preside again. If that happens, your perception of yourself as indispensable could jeopardize the modest improvements in governance.