Once upon a time, when Tesla CEO Elon Musk was just another Silicon Valley founder looking for attention, he happened upon a novel approach to the art of self-branding. In a master stroke of image crafting, Musk positioned himself as “the good billionaire,” whose noble missions to save the planet and bring life to new ones separated him from the rapacious self-interest people rightly ascribe to the fabulously wealthy.
Now, having ridden that branding to a previously unimaginable level of wealth and power, Musk is shedding its inconvenient burdens. Perhaps most dramatically, he is locked in a battle with the Delaware Chancery Court over a stunning $56 billion pay package. After court Chancellor Kathaleen McCormick overturned Tesla’s attempts to approve the package for a second time, Musk’s subsequent online outbursts at the ruling and McCormick herself make it clear that he really does care about the money after all. But his fury also reveals something deeply personal.
Musk has always been more of a promoter and fundraiser than the heads-down engineer he likes to pretend to be.
For more casual observers, Musk’s turn from environmental hero to election-buying oligarch roughly coincided with his 2022 purchase of Twitter. But his 2018 compensation package was its genesis, marking Tesla’s turn from automotive innovator to stock-pumping hype factory. Beyond its sheer size — dwarfing any corporate compensation plan up to that point — its structure also doubled down on Musk’s stock-pumping instead of incentivizing more balanced leadership. Tellingly, the proposal coincided with Musk’s first unambiguously villainous episodes on Twitter, in which he called a hero of the Thai cave rescue operation a “pedo” and later announced a private buyout of Tesla so entirely imagined that he had to settle fraud charges with the Securities and Exchange Commission.
Musk has always been more of a promoter and fundraiser than the heads-down engineer he likes to pretend to be, but the 2018 CEO Award was one of the first times this was made unambiguously clear in public. Already Tesla’s largest shareholder, Musk had more than enough incentive to pump the stock as it was. What he needed to spend more time on was shoring up Tesla’s shaky fundamentals in boring operational areas like manufacturing, supply chain and service – challenges that have always haunted Tesla’s sparkling public image. But the Tesla board’s proposal tied 20 of Musk’s 28 targets to increases in either stock price or revenue, a clear endorsement of his hype-happy leadership.
In traditional market theory, strong operations and the prospect of reliably growing cash flow should take care of themselves, but Musk and his board’s decision to cut out the middle step and make stock price the end in itself has been consequential. The company’s core business was rescued by a perfect storm of tail winds during Covid: Tesla launched its most mass-market car, the Model Y, at the peak of EV hype and in the first period of sustained undersupply in the auto industry since World War II. Yet its market share, profit margin and pipeline of new products were showing few signs of the hypergrowth Musk has promised.
In the place of real, tangible business results, a carnival of increasingly absurd hype has grown up in its place. Musk promised a self-driving car in every driveway long before the 2018 award, but in the years since then he has moved from misleading demonstrations on public roads to outright fantastical performances of self-driving theater on Hollywood studio sets. And despite failing to deliver on nearly a decade of self-driving promises, he has doubled down with the only technological promise that could be more fantastical: a race of humanoid robots that will replace all human labor and usher in an end to scarcity writ large. These blatant fantasies have delivered all that the Tesla board hoped for in 2018, and more, as Tesla’s market valuation is on its way toward doubling the $650 billion valuation it incentivized. But, in pushing Musk, already possessed of a ruthless and fanatical online fandom, who gleefully attacked anyone who took his words as less than gospel, toward highly lucrative science fiction, they also pushed him over the edge. His mandate to turn perception into reality has had a horrible cost. Musk’s increasingly round-the-clock posts on Twitter in 2018 show an increasingly toxic relationship with social media, pulling him — and, increasingly, everyone else on the site — into the self-serving parallel reality he has built for himself online. At this point Musk has sucked so much of the world into his online ego trip that there’s reason to believe it’s not just about money for him anymore. Indeed, McCormick and the Chancery Court make no argument with the staggering size of the compensation award, instead voiding it on the grounds that Musk failed to properly inform shareholders and generally live up to basic governance, accountability and procedural rules. In short, Musk’s eye-watering wealth is only the fuel for the real problem: the fact that he acts as if he is above not just the law but the basic constraints of reality.
Ed Niedermeyer
Ed Niedermeyer has covered the auto industry since 2008. He is the author of "Ludicrous: The Unvarnished Story of Tesla Motors" and a co-host of "The Autonocast." 
