Join our community of smart investors
No Free Lunch

Why the world should be outraged at Tesla's governance

Why the world should be outraged at Tesla's governance
Published on January 8, 2025
Why the world should be outraged at Tesla's governance

Elon Musk’s first company was Zip2, a software venture which he set up with his younger brother, Kimbal, in 1995. Developing it left them hard up – they slept in their office – and, after four years, they managed to sell the business for $307mn (£245mn). This was in 1999, just before the dotcom bubble burst. Elon Musk’s share was $22mn.

He invested $12mn of that in X.com, which evolved into Paypal and was sold to eBay in 2002. Musk received $176mn. $100mn went into founding SpaceX, his rocket company, and then in 2004, for $6.35mn, he became the majority shareholder of Tesla.

According to recent articles in the US Institute for New Economic Thinking (INET), in the early years, Musk ended up investing about $300mn in Tesla (US:TSLA). He’s received no meaningful salary or bonus, but every so often Tesla has granted him a hefty market-based option, with 10 years in which to buy the shares fixed at the (historic) grant price – but only if ambitious performance conditions are achieved.   

This is subscriber only content
Start your trial to keep reading
PRINT AND DIGITAL trial

Get 12 weeks for £12
  • Essential access to the website and app
  • Magazine delivered every week
  • Investment ideas, tools and analysis
Already a subscriber? Sign in