Tesla and Elon Musk deny WSJ report that Tesla opened search for new CEO

Tesla board contacted exec search firms to find Musk replacement, WSJ reports.

See full article...

 

[el_oscuro]

I'll do it for 5%! And I have real qualifications: I've held a senior role at a company as it augured into the ground before.

Speaking of auguring into the ground:

Spoiler

 

[real mikeb_60]

There's no way this is an anti-Musk move by the board. The board isn't independent and Musk has effective voting control. And he's responsible for around 95% of TSLA's market cap. When you're sitting on a shaky meme stock you don't dump the meme.

More likely Musk is looking for a way out. He's not interested in running a car company. He's very particularly not interested in running this particular car company. He wants to be running an AI company and/or a media empire and/or a city on Mars, all of which are far enough in the future to leave a nice runway for massive fund-raising before any actual results are required.

The problem is the getting out. Musk leaving Tesla means TSLA's stock reverts to a normal car stock valuation which blows a huge hole in his personal financial empire. So he can't just walk away. He needs a buyer who'll pay a Musk premium for a business Musk isn't interested in anymore.

Best guess: xAI investors. In the form of dilution, with xAi buying out TSLA in a stock deal. Not likely today's SEC would look closely at that one. Nor the next one in which Musk gets the xAI board to cut him enough options to wipe out his own dilution, thereby throwing the entire cost of the deal onto the outside xAI investors. While simultaneously screwing TSLA investors by paying them out in inflated xAi stock. All justified by synergies.

Second best guess: someone who wants to launder a shitload of money to Donald Trump.

Third best guess: someone with larger financial interests involving the federal government.

Either way, Elon's not going back to running a failing car company, so they're going to need a plausible candidate to run the place after he's sold out and gone. That's probably what this search is about, though depending on headhunters to be discreet about a big new client was probably a mistake.

Crazy thought: if TrumpElon manages to gut the EPA, and eliminate its regulations enough that the emission credits program dies out, what will Tesla do for spare change? Everybody else will be pivoting to ever more giant (and profitable) diesel & gasoline-powered pickups and SUVs, but they won't need to buy emission credits from Tesla any more.

That said, so far at least, Tesla isn't a "failing" car company, but it certainly is showing cracks in the facade. They still appear to make a profit per unit sold, on average, unlike nearly everybody else (though GM might be about to cross that line) with EVs (E: in the US at least). And if Their Favorite President^TM sticks with backing off from tariffs on offshore-sourced parts for in-country vehicle assembly Tesla will benefit as much as the others.

Even if I could afford one, though, I wouldn't buy one. Several reasons, but the putative CEO's antics are certainly among them.

 

[Mechjaz]

First, I want to say how much I en joyed encountering a good old-fashioned line-by-line fisking. Even though I disagree: that was fun.

I appreciate you giving me a name for that style of argument.

 

[terrydactyl]

Removing Elon Musk is simultaneously the best thing the board can do for the company and the worst thing it can do for the stock price.

Since they work for existing shareholders, it is arguably their fiduciary duty to keep him.

On the other hand, when Steve Jobs died is was said to be terrible for Apple's future. Turned out not to be the case. Then again, can the Tesla brand survive the taint of Musk?

 

[blank0]

Maybe he should quit his low-productivity CEO job and move to a high-productivity manufacturing or materials refining job.

He could be a great asset to a macro data refinement team, especially that he’s already fairly skilled at forgetting uncomfortable memories.

 

[jbuchman]

They should simply dissolve the company and give the money back to the shareholders, I don't believe it's possible to wash off the stench at this point

 

[Resolute]

This very poor excuse for a human does not deserve anything. They need to give him the boot to save the brand. He’s nothing short of a POS.

Honestly, Musk is the brand. He made it so. I'm not sure Tesla has a long term future without him.

 

[dikbozo]

Maybe he should quit his low-productivity CEO job and move to a high-productivity manufacturing or materials refining job.

Perhaps he come to the office more and do some 'hands on work', like doing a more public service job that the employees would notice, think custodial. and OFC in the off hours, tidying up the excess contents of various office receptacles. The navy expression 'swabbing the decks' could be another of these public service activities.
This would be considered Executive Level Employment and would afford the opportunity for the shareholders to get a bit more value from Leon, in light of the judicial push back on his pay packet.

 

[BananaBonanza]

It’s easy for Tesla to replace Musk with a better CEO.
But it will be impossible to replace him with a better snake oil salesman.

Unfortunately, the value of the board’s stock options depends 90% on the latter.

 

[stormcrash]

Crazy thought: if TrumpElon manages to gut the EPA, and eliminate its regulations enough that the emission credits program dies out, what will Tesla do for spare change? Everybody else will be pivoting to ever more giant (and profitable) diesel & gasoline-powered pickups and SUVs, but they won't need to buy emission credits from Tesla any more.

That said, so far at least, Tesla isn't a "failing" car company, but it certainly is showing cracks in the facade. They still appear to make a profit per unit sold, on average, unlike nearly everybody else (though GM might be about to cross that line) with EVs (E: in the US at least). And if Their Favorite President^TM sticks with backing off from tariffs on offshore-sourced parts for in-country vehicle assembly Tesla will benefit as much as the others.

Even if I could afford one, though, I wouldn't buy one. Several reasons, but the putative CEO's antics are certainly among them.

Last quarter their profit was smaller than the revenue generated by tax credits from non ev auto sales. They lost money on every unit sold without those credits

 

[Super King]

You can tell how truthful their denial is by their use of ALL CAPS TEXT.

More truth = More caps
That's just basic science

 

[ronpadz]

I'm not sure what would make me more nervous as a Tesla shareholder, Musk's bonehead decision to singlehandedly gut the US government or the fact that Tesla has no succession plan. Welp, I guess that's a problem I'll never have.

 

[ScifiGeek]

Translation: "I'm done ratfucking the US Government and can now return to my previous part-time side gig ratfucking Tesla.

Nothing good is going to come out of any of this, but I live in hope of seeing the day when Trump decides he no longer needs the Oligarchs like Musk, and disposes of some of them... Like Putin did.

Hope it's before he invades Canada.

 

[ScifiGeek]

Removing Elon Musk is simultaneously the best thing the board can do for the company and the worst thing it can do for the stock price.

Since they work for existing shareholders, it is arguably their fiduciary duty to keep him.

May as well stay makes the boycott decision clearer for some.

 

[NinjaNerd56]

Grok for CEO! *

*Can't do any worse than the current option.

Which typifies Musk’s abject ignorance.

Grok - he does NOT grok in fullness and the only water he will share is piss.

Colossus - originally a book trilogy and a bad movie about an AI that takes over the world. And then causes Earth to be invaded by Martians.

 

[nottatae]

I can't see the name Denholm and not think of: https://theitcrowd.fandom.com/wiki/Denholm_Reynholm

Don't care about first name vs last name.

And strangely more relevant than normal because Tesla.

 

[Cart_catalog]

It's also possible the board is doing this to get some leverage over Musk to get him back to work. Because, much as i despise the man, when he is paying attention, he makes things happen. He does it in the worst possible ways, but from a board's POV, that's fine because it makes money. I find it plausible that they would continue supporting him so long as he isn't distracted. I also find it plausible that the executive search firm is a Plan B.

However effective Musk may have been in the past the real question is how effective is he going to be in the future?
His numerous obsessions and the vehemence with which he promotes all of them, as well as his apparent drug use, suggest to me that he will become less effective at any one particular topic. Can he focus on any one thing long enough to make the needed changes and come up with winning ideas? I expect not.

 

[Snark218]

Like Falcon Heavy. Like Starship. Like the enormous amount of work required to move manufacturing to a new state (on a whim because irritated, but still). You can argue that other people do the work, and you would be correct, but also missing the point. The man is a dumpster-fire of a human being, but from a supportive board's point of view, when he isn't distracted, he is awesome for them.

I've seen very little evidence that he has been capable of getting things done in a constructive, disciplined way for a number of years now. To whatever extent he was that guy, I think the objective evidence is that he's not anymore, and that he's devolved into a distractible, addled, megalomaniac chaos agent motivated largely by narcissistic injury and impunity. Typically, when someone starts acting that way, it gets worse, not better. The board may be conflicted and captive, but they are not stupid people, and I suspect they know this.

So I think it's simpler; the board knows that the meme stock (edit: stonk) implodes without him, but that the business implodes with him. They're trying to find a Linda Yaccarino to split the difference and keep him semi-engaged and placated as a figurehead/cheerleader/cult leader/sacred monster while getting a real CEO to run the business somewhere that's not the ground.

 

[PosterBoy]

Tesla's board derive vast wealth from their Tesla shares, and know full well the share price would collapse if they replaced Musk with a real CEO. So there is precisely no chance they'll do that.

According to Google...

"Other than the small purchase from Joe Gebbia disclosed last night, Tesla executives and board members have exclusively exercised stock options and sold them right away. Robyn Denholm, Tesla's Chairwoman, has been the top seller. She sold over $150 million worth of Tesla stocks over the last 6 months."

 

[GitM]

Could the Tesla board just have been looking for their own Gwynne Shotwell? An actual functioning adult to run the company while Elon retains the CEO title and runs off to continue driving his other businesses and the United States into the ground? That would make more sense to me than axing Elon completely.

 

[Snark218]

Last quarter their profit was smaller than the revenue generated by tax credits from non ev auto sales. They lost money on every unit sold without those credits

Nah, not really. They can still build individual units and sell them for more than it cost to produce, so they're making money on the sales. They're just selling few enough units that they can't cover their expenses with the total revenue of those sales without the credit sales to prop them up.

 

[graylshaped]

Grok for CEO! *

*Can't do any worse than the current option.

I don't know. Could be raining.

 

[Castellum Excors]

Musk is out here doing the song and dance and taking incoming fire while Thiel is in the background creating the surveillance dystopia he always wanted.

 

[DK2]

That said, so far at least, Tesla isn't a "failing" car company, but it certainly is showing cracks in the facade. They still appear to make a profit per unit sold, on average, unlike nearly everybody else (though GM might be about to cross that line) with EVs (E: in the US at least). And if Their Favorite President^TM sticks with backing off from tariffs on offshore-sourced parts for in-country vehicle assembly Tesla will benefit as much as the others.

Definitely failing. They're facing massively increased competition with an aging and/or unpopular product mix and a brand that's now toxic in their major markets. Tesla sales are down YOY and 13% in Q1 whereas EV sales overall are up.

The right management might turn the company around. But there's no way they're worth a trillion dollars, or even 10% of that. Not as a car company. Valued that way they're a pretty much guaranteed failure.

Musk will figure out some way to get out from under the valuation overhang. He always does. But it won't be by running the car company.

 

[vonduck]

not entirely sure why him spending more time in tesla would make any sort of difference as he's the albatross around the neck of the brand.

 

[GameBoyColor]

Are there any rules around minimum levels of involvement to be the CEO of a public company?

If average employees are required to work in person and be drug tested, why shouldn't the CEO?

side note: I also believe all congresspeople should be drug tested and required to participate in at least 50% of the votes. If they fail on either front, there should be a remediation process with the option of automatic removal if they do not improve.

 

[graylshaped]

I've been organizing Tesla Takedowns locally and the "feedback" we get from the other side is that we're getting paid to do it. It's striking that Musk and his followers can't seem to wrap their minds around the idea that people do things for reasons other than financial renumeration.

Just tell them its vengeance. They grok vengeance. It's their raison d'etre, only MAGA-made. None of this frenchified stuff. It reminds them of guillotines.

 

[Snark218]

not entirely sure why him spending more time in tesla would make any sort of difference as he's the albatross around the neck of the brand.

Only if you consider it an actual business, and not a stock.

 

[graylshaped]

not entirely sure why him spending more time in tesla would make any sort of difference as he's the albatross around the neck of the brand.

Bear in mind last summer intelligent money managers knew his huckstering was the only thing propping up Tesla's inflated valuation and voted grudgingly to approve the compensation plan I think most of them knew he wasn't going to be able to earn anyway. I suspect it was their last ditch effort to buy time in the forlorn hope maybe, just maybe, the horse might learn to dance.

 

[Uragan]

First, I want to say how much I en joyed encountering a good old-fashioned line-by-line fisking. Even though I disagree: that was fun.


I don't know. What I was trying to postulate was that it was possible that there were other explanations that might be worth explore, such as the board using it strategically to get someone back in line. I admit that with his brother, employees, and friends on the board it seems unlikely, but is it possible that even they see a problem? Yes.

I’m sure they notice that Musk’s increasingly unhinged and unpopular behaviour is a problem but I’m equally sure they realize that the reason their holdings in Tesla are as high as they are is because of Musk. No Musk, no irrationally high stock prices.

Like Falcon Heavy. Like Starship.

Falcon Heavy isn’t successful solely because of Musk (or any one singular individual at SpaceX).

Starship is absolutely not a success yet. And is frankly a waste of SpaceX’s resources and time, IMHO.

Like the enormous amount of work required to move manufacturing to a new state (on a whim because irritated, but still). You can argue that other people do the work, and you would be correct, but also missing the point.

You can’t put that solely on Musk’s shoulders though. Musk isn’t the one figuring out how to do that. He’s just the one who threw a temper tantrum and demanded that the company move states.

The man is a dumpster-fire of a human being, but from a supportive board's point of view, when he isn't distracted, he is awesome for them.

The problem is that he hasn’t been focused for years.

Again: You aren't wrong, but from a supportive board's point of view, that reason is that he's distracted by shiny politics instead of focusing on his job.

The problem is that he is so distracted by his 6 other companies, being terminally online and trying his damnedest to follow and promulgate the 14 words. His dive into politics is just another bullet on a laundry list of distractions.

You can’t say that someone who is trying to run 6 companies, “play” Diablo IV, find the next woman to be a womb for his ever growing brood and tweet about absolute nonsense all around the clock was ever focused on Tesla.

Tesla was doing well before he got distracted, so either you get him un-distracted (supportive board), or you replace him (board fed up with his s—) Could be either of those. Both could lead to hiring an executive search firm.

Past performance is not indicative of future success. I honestly think that Tesla would eventually be hurting regardless if Musk was fully committed to Tesla and Tesla only. Tesla has made huge promises year after year that they have continually failed to deliver on. Tesla is trying to make a business case for Optimus that is absolutely ridiculous and not viable. Eventually those cheques will need to be cashed and they will absolutely bounce.

Sure. But until now it wasn't a problem.

I disagree. It just was a problem that the board either saw and was willing to ignore or were not cognizant of.

Please don't think I am defending or supporting the man. He's a complete asshat. What I am doing is pointing out that there are other possible explanations that aren't entirely ridiculous.

Except you are defending him.

Which company would that be? The right-wing social network company, or the rocket company, or the tunnel-boring company? (That last one being a complete scam to prevent cities from investing in public transit. Really, The Boring Company is a pro-Tesla ploy.)

xAI.

No. I am not saying that. I am says that the board probably wants him not to be distracted. Don't let your irritation confuse you into thinking I support the man.

I am not even going to start to guess what the board may or may not want of Musk other than basically cater to his every whim because he’s good for their net worth. Hence why the pay packages were overturned… the board is not independent of Musk.

That may be. We don't know this. There is no evidence either way. We're all speculating here. None of us really knows. We're playing a game of Kremlinology here.

Of course… I’m not sure why you think that is news to any of us?

 

[Nogami]

The problem really isn't about the amount of work he's doing at Tesla, it's that he's become a toxic personality for brands he touches. He needs to just take a break for a few years so he's not in the spotlight for a while.

 

[nerdrage]

Why should the board deny doing their duty to investors and trying to get rid of a CEO that is damaging their brand, their sales and their share price. They should be ashamed to admit that they are doing nothing about this ongoing catastrophe.

Tesla is public and owned by the investors, not by Musk. He is an employee of Tesla, same as the rest. If any other employee were sabotaging the company, wouldn't they get the boot?

 

[just another rmohns]

According to Google...

"Other than the small purchase from Joe Gebbia disclosed last night, Tesla executives and board members have exclusively exercised stock options and sold them right away. Robyn Denholm, Tesla's Chairwoman, has been the top seller. She sold over $150 million worth of Tesla stocks over the last 6 months."

Oh man. That's not something to worry about at all.

 

[just another rmohns]

Except you are defending him.

If that is how you read it, then either I have failed to communicate, or you were unable to see through your hatred of Musk. I was not at any point "defending him"; I was exploring how from a supportive board's point of view, there are reasons to retain him. You do make effective points about the downsides of keeping him, and I agree with all of them. But this isn't about me: I'm not the board.

I will accept that it was my own failure to explain that I was trying to explore other possible explanations for the executive search. I thought it was clear I don't support Musk. I guess it was not clear.

 

[pug fugly]

How could they be motivated to do their jobs when they only get paltry millions and not the billions that are totally justified to get their CEO to show up for work?

The company is well past it's due date. If this were an honest, logical timeline the company would have gone tits up somewhere around the pedo-guy incident. Their products are crap even without the nut job in charge.

 

[MagicDot]

It's a teetering house of cards and only a constant stream of announcements, drama, and breaking news can keep it from its inevitable collapse.

 

[graylshaped]

If that is how you read it, then either I have failed to communicate, or you were unable to see through your hatred of Musk. I was not at any point "defending him"; I was exploring how from a supportive board's point of view, there are reasons to retain him. You do make effective points about the downsides of keeping him, and I agree with all of them. But this isn't about me: I'm not the board.

I will accept that it was my own failure to explain that I was trying to explore other possible explanations for the executive search. I thought it was clear I don't support Musk. I guess it was not clear.

There are no reasons for a board doing its job to support him. None.

The first thing a competent replacement would do is to insist on a wholesale replacement of the board and a thorough revamp of Tesla's corporate governance. The Tesla board is arguably farther up Musk's ass than the Eisner-led Disney board that had his freaking grade school teacher on it. The board knows that if he goes, they must follow.

 

[Geeklaw]

"there was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company."

"This is absolutely false (and this was communicated to the media before the report was published). The CEO of Tesla is Elon Musk and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead," Denholm's statement said.

Translation:
"The Board verbally directed an expendable lackey to make a list of marginally qualified white men and one woman who might be secretly approached about becoming a puppet CEO of Tesla, who wouldn't ever have real control because Elon would remain the controlling shareholder. We definitely didn't make any official action to replace the goose-stepping goober we all rely on to keep laying golden eggs."

 

[Kaiser Sosei]

The problem really isn't about the amount of work he's doing at Tesla, it's that he's become a toxic personality for brands he touches. He needs to just take a break for a few years so he's not in the spotlight for a while.

If Tinkerbell Musk doesn't get attention he will die. He needs it, much like an abused child, even if it's bad attention. Attention is attention.

 

[stormcrash]

Nah, not really. They can still build individual units and sell them for more than it cost to produce, so they're making money on the sales. They're just selling few enough units that they can't cover their expenses with the total revenue of those sales without the credit sales to prop them up.

If they're only covering their unit costs and not their fixed costs then they're not "making money" on the sales at the end of the day because those fixed costs are still part of the total COGS (cost of goods sold)