Is Elon Musk worth his £44bn Tesla paycheck?

Elon Musk might do whatever he wants again.

His Tesla pay deal, worth up to $56bn (£44bn) depending on the company’s share price and currently backed by shareholders, represents 75% of total UK school spending (£60bn) in May 2024, which is around A quarter of the NHS budget (£192bn).

To his many admirers, Mr. Musk is worth every penny.

His businesses include Tesla, SpaceX, X (formerly Twitter), Starlink, Neuralink and his latest artificial intelligence project, X.ai.

You might say Tesla opened up the US electric car market, SpaceX just launched the world’s most powerful rocket into space, and a man who volunteered to be the first to have a Neuralink microchip implanted in his brain can now control a computer Use his ideas.

Today, the $56 billion question is: Would the portfolio have been as successful without him?

You could argue that Mr. Musk’s salary deal was designed to keep him at Tesla.

There had been speculation about his future at the electric car maker before it was approved by the company’s board of directors in 2018.

The deal is structured like this: If Musk doesn’t hit certain milestones — such as Tesla’s market value, sales and underlying profits — he doesn’t get paid at all.

However, according to Forbes magazine’s 2018 rich list, he was worth nearly $20 billion, and at that stage, he barely had change behind the sofa.

But if he does achieve certain goals, the potential payday would be astronomical.

To be fair, Musk has achieved the goals set for him. Tesla’s market capitalization, for example, has grown from $54 billion to the $650 billion target set in the original deal.

It has since fallen back to $570 billion.

When Tesla falters in 2022, it’s said to be because Mr. Musk took his eye off the ball and focused on X — so it was his absence, not his presence, that caused the problem.

However, his profile clearly adds huge value to these companies.

Mr. Musk distrusts communications teams, preferring to mass broadcast directly to his 187 million followers on social networks.

If Mr. Musk is on your side, your PR will take care of itself, with mixed results but always compelling results.

He has created countless global headlines from behind his keyboard, a power you might say very, very few possess – publicity that money can’t buy.

He also wields enormous political influence: He has met with many world leaders, including Chinese President Xi Jinping. He claimed to have had a phone call with Russian President Vladimir Putin and also live-streamed a conversation with Israeli Prime Minister Benjamin Netanyahu.

He is a stern and demanding boss, a workaholic who doesn’t take no for an answer. Former employees say even the most dedicated among them burnout, but he didn’t.

Dolly Singh, who worked for Musk at SpaceX from 2008 to 2013, previously told BBC News that he was an “incredible leader.”

“If it wasn’t for that, he wouldn’t be where he is now,” she said in 2022.

But she admitted working for him was “tiring”.

While shareholders support Musk’s pay package, legal experts say it’s unclear whether the court blocking the deal will accept a re-vote and allow the company to reinstate his compensation.

But former Tesla backer Steve Westley told the BBC earlier this year that keeping Musk was not necessary.

“Elon was a unique visionary … but I don’t know if that means he’s critical to running any or all of these companies today,” he said.

“No one can stay on top forever, especially when you’re trying to lead seven companies at the same time.”

For all the success under Musk, there have been times of failure.

Tesla wasn’t profitable at all for years, and then a tweet about taking the company private sparked financial chaos that ultimately led to a regulatory investigation and his resignation as CEO.

I spoke with two former employees who claimed that speaking out about Tesla’s safety issues cost them their jobs and professional reputations.

Tesla almost went bankrupt. Not all SpaceX rocket launches are successful, and each failure costs the company millions of dollars. Neuralink chips began malfunctioning shortly after implantation, although the problem has since been fixed.

Musk recently claimed that Starlink is now financially break-even, but a report published by Bloomberg suggests that he underestimated the huge cost of launching the satellite network infrastructure.

But the U.S. views high-risk businesses differently.

Mustafa Suleyman, co-founder of Google DeepMind and who just joined Microsoft, told the BBC: “The US market is not only huge, but it is also more prone to big things.”

He added that Britain could be “more tolerant and celebrate failure more”.

If Mr. Musk is hurt by failure, he doesn’t show it. He appears loud, dominant, and defiant.

He said today that he has sent a cake to the state of Delaware, which is trying to block his $56 billion Tesla salary deal.

It bears his favorite phrase “vox populei, vox dei” – the voice of the people is the voice of God.

Additional reporting by Dearbail Jordan.