March 23, 2018 7:07 pm
Look up towards the stars as you read this.
A few weeks back, I wrote about the upcoming vote of Tesla’s shareholders on Elon Musk’s $2.6 billion compensation package. Well, yesterday put an end to that speculation with approval of a package that would grant Musk the $2.6 billion of equity based on Tesla achieving certain market cap, revenue, and earnings metrics. Over the next 10 years, the package could end up being worth upwards of $50 billon, potentially putting him in contention for the mantle of the world’s richest person. But it’s also an enormous bet; the biggest one Musk has made yet. He will take no salary and get no other compensation. If Tesla fails, Musk and his dreams become a footnote in history.
In that article, I asked the question, is Musk worth it? That’s now a moot point, since the only people who can and should answer that question are the stockholders and the board Musk ultimately reports to. And they just did. Whether they were right or not is something we’ll just need to wait and see.
However, what I find even more interesting is what Musk might do with that fortune. Any answer to that is, of course, speculative, however, looking at where Musk has spent his money and what he has said about wealth and his ambitions may offer a clue.
Here’s what we know:
- Musk rarely takes time off. By some accounts, he works 80-90 hours a week. He takes very few vacation days, with the exception of a yearly camping trip with his sons.
- Musk nearly went broke in 2009 and was living on loans from friends. This after $22 million from the sale of his first company, Zip2, and $180 million from the sale of PayPal. This fact has often been attributed to a very expensive divorce from his first wife. However, Musk had also invested nearly everything in SpaceX and Tesla–something he had done before with half of his $22 million from Zip2, which he invested in X.com which then became PayPal.
- Musk doesn’t have a mega yacht and he doesn’t have billionaire hobbies, such as the America’s Cup, golf courses, or a professional sports team.
- He does have an impressive collection of real estate worth north of $70 million in Bel-Air, a Model T, a million-dollar Esprit Lotus used in the movie The Spy Who Loved Me, a classic 1967 E-Type Jaguar, and a McLaren F1, which he totaled.
- He has taken the Giving Pledge, in which promises to give away more than half of his wealth to philanthropies.
- Although he is clearly committed to Tesla for the next 10 years, Musk is obviously involved in many other passions. Most notably, SpaceX and his often-stated intent to make humanity an interplanetary species, with Mars as the first waypoint on the journey.
So, what does all that point to? Well, Musk isn’t into distractions. He is task-focused. That’s not likely to change. He consistently invests in his ambitions and his ambitions are growing exponentially. His long-term goal is nothing short of interplanetary.
It’s that last point that I believe answers both the question of why Tesla’s board agreed to one of the most outrageous compensation packages ever and what Musk will spend his money on.
Musk is so obsessed with building a bridge for humanity to reach the stars that my greatest fear, as a Tesla investor, would be that he might very well get bored with Tesla and just move on. That will undoubtedly be the case at some point, but with $50 billion on the line, not for the next 10 years. If there are golden handcuffs then these are made of stardust.
On the other hand, Musk is no fool. He knows that $50 billion, in addition to a current $20 billion stake in Tesla stock, could end up being worth about $184 billion. That could be a game-changer for interplanetary travel. By way of comparison, NASA’s budget is $19 billion.
But wait, what about the Giving Pledge? Well, in an interview with Aeon, Musk was quoted as saying, “I think there is a strong humanitarian argument for making life multi-planetary in order to safeguard the existence of humanity in the event that something catastrophic were to happen, in which case being poor or having a disease would be irrelevant, because humanity would be extinct. It would be like, ‘Good news, the problems of poverty and disease have been solved, but the bad news is there aren’t any humans left.'”
Ensuring humanity’s survival seems to me to be as philanthropic as it gets.
Still wondering what Musk will spend his billions on? I’m not. When it comes to people, past behavior is almost always an indicator of future behavior. For Musk, the behavior is pretty clear; place ever-bigger bets on even more audacious ambitions.
This is not someone who intends to be a footnote. This is someone who is reaching for the stars.Tags: Business
Categorised in: Business
This post was written by All Charts News