This past week Tesla shareholders voted 75% in favour of a stock compensation package for their CEO Elon Musk. It could make him the world’s first trillionaire if certain performance targets are met over the next ten years. Musk will have his work cut out for him as Tesla sales have plummeted including a 50% drop in Germany alone last month. In order for Musk to meet that trillionaire milestone, Tesla will have to deliver 20 million electric vehicles over the next decade and increase the stock price six times what it is today. Let’s assume that he pulls a rabbit out of his hat and he hits those targets, is Musk worth one trillion dollars?
Economics is a cruel science, and life is not fair so let’s get over it. The simple fact is this. The worth of anything and that includes your house, your car, a professional athlete, Liberace’s piano, Elvis Pressley’s guitar, and even your life, are determined by two things and two things only. What the seller is prepared to sell a product or service for and what the buyer is prepared to pay, end of story. It may not be worth it to you or me, but if two parties are uncoerced and are willing to exchange money for a product or service, then that is the worth in the marketplace. Ethics and morality are a different story.
The financial analysts will have a field day with this one as they crunch the numbers and try to make a correlation between shareholder equity and CEO compensation, but regardless of their findings, it was the 75% of the shareholders that agreed to this. If you have an issue with Musk becoming a trillionaire, don’t blame Musk, blame the shareholders.
Nonetheless, people will still cry the blues over Musk’s compensation. Unfortunately, this is nothing more than envy. For many, it is a constant struggle trying to make ends meet. Grocery prices have been climbing, and it is very challenging for young people to buy a house. These are the necessities of life, so it is very easy to view Musk with contempt.
The question I ask is simply this. What does Musk do with his money? Is he making the world a better place? Is he trying to find a cure for cancer? What philanthropic causes is he behind? There are 175 countries in this world that do not have a GDP of one trillion dollars and yet this massive pool of capital that is very hard to comprehend could be held by one man.
Greed is one of the seven deadly sins. After ten million, does it really matter? How much money does one man need? Taking a line from the Spiderman comic book, “With great power comes great responsibility”. If Musk is shirking his moral responsibilities, then, in my view, he is not a great man and morally unworthy of that compensation. If he is making the world a better place like providing drinking water for the masses, providing shelter for the homeless, addressing the poverty situation, improving literacy then I hope he makes all the money in the world. But if he uses power to exert political influence so the uber rich can get tax breaks; if he continues to be involved with initiatives like DOGE where Americans personal data have been compromised, and if he continues to spew misinformation with conspiracy theories, then I can only control what I can control and never buy a Tesla product and hope the general public does the same. Let the shareholders deal with the consequences.