Give Elon Musk all he wants to test his ‘Musk Magic’ premium

How resilient is this company? Regarding Tesla's operations, the board seems to think only one individual should be at the helm. Tesla chair Robyn Denholm stated in her shareholder letter: “Elon singularly possesses the leadership characteristics and technical manufacturing know-how” to propel Tesla forward. However, being seen as irreplaceable presents a challenge for both leaders and their boards. While it highlights a leader's significant influence, it also implies that the company's future might be jeopardized by their departure.

How resilient is this CEO? He began the year as the defiant, chainsaw-wielding figure associated with DOGE, with his “polarizing and partisan actions” potentially impacting Tesla's U.S. EV sales by over 1 million, according to a Yale study. Currently, he states he's not “comfortable building a robot army here and then being ousted.” So he's prepared to abandon all his accomplishments if his demands aren't fully met?

Is this how a public company should work? Numerous founders have approached public markets with a "give-me-your-money-and-shut-up" mentality. However, shareholders long ago determined that significant capital entails significant accountability. The era of treating your company as your personal ATM, sending directives to an insular board, and acting as though those funding the venture should have no input or transparency regarding the expenditure of their funds has passed. Delaware courts have previously have struck down Musk’s compensation packages. Musk refers to the proxy advisory firms as “corporate terrorists” for advising shareholders to reject the pay package.

Why not? This is ‘moonshot pay’ that will come to pass if Musk achieves bold, apparently unattainable objectives. He prospers financially. We prosper financially. So what if it dilutes current shareholders? Or that shareholders are paying a lot after Tesla's had an uninspiring year and Chinese EV sales are surging? Possibly the most effective method to evaluate that “Musk Magic” premium is to grant Elon Musk all his desires.

More news below.

Contact CEO Daily via Diane Brady at [email protected]

Top news

U.S. Cuts flights

The U.S. Federal Aviation Administration has ordered 40 major U.S. Airports to reduce flights by 10% with air traffic controllers facing a scarcity, worsened by the longest government shutdown on record, they're working without compensation during this funding hiatus. This situation has led many to call in sick, seeking alternative sources of income. 

SCOTUS skeptical of Trump’s tariffs

U.S. Supreme Court justices appeared skeptical the Supreme Court is expected to rule on whether President Donald Trump has the unilateral power to impose tariffs using a 1970s emergency statute, though a decision isn't anticipated for several months, prolonging business uncertainty. 

Huang touts China’s AI ‘optimism’ 

Nvidia CEO Jensen Huang warned that China will win the AI race against the U.S. Due to its more optimistic outlook on AI and the energy subsidies it's handing out to AI developers. That contrasts with the U.S.’s “cynicism” towards AI, he said, including proposed state-level regulation of the tech. 

AI’s new political sway

The physical infrastructure of the AI boom is quietly shaping politics as the geographic reach and substantial need for water and power from data centers impact voters. For example, in Tuesday's election, Abigail Spanberger secured victory in Virginia's gubernatorial contest by promising to hold tech firms accountable for their “fair share” to bolster the electrical infrastructure.

McDonald’s and Cava reveal K-shaped economy

Restaurant chains McDonald’s and Cava both reported earnings this week that indicate a K-shaped economy, where higher-income consumers are spending strongly while lower-income consumers cut down on expenses. McDonald’s CEO Chris Kempczinski pointed to a "bifurcated consumer base" in the U.S. Quick-service restaurant industry during the company's earnings call on Wednesday, with a near double-digit drop in traffic from lower-income consumers in the quarter while traffic growth among higher-income consumers increased nearly double digits.

Ford CEO pushes back against Apple CarPlay 

Ford CEO Jim Farley expressed concern that Apple's recent CarPlay enhancement, which allows for the mirroring of iPhone interfaces and the presentation of vehicle information such as fuel status and velocity, grants the technology behemoth excessive authority as an external entity. “Do you want the Apple brand to start the car?” Farley asked during an interview with The Verge.

The markets

S&P 500 futures are up 0.11% this morning. The last session closed up 0.37%. STOXX Europe 600 was down 0.08% in early trading. The U.K.’s FTSE 100 was down 0.3% in early trading. Japan’s Nikkei 225 was up 1.34%. China’s CSI 300 was up 1.43%. The South Korea KOSPI was up 0.55%. India’s NIFTY 50 is down 0.34%. Bitcoin was up at $103K.

Around the watercooler

IBM's chief executive acknowledges that the hiring difficulties faced by Gen Z are genuine. However, following a commitment to increase graduate recruitment, the company is proceeding with layoffs affecting thousands of employees.By Preston Fore

Palantir asserts that universities are no longer dependable preparation grounds, consequently recruiting 22 secondary school pupils instead: ‘Avoid the debt. Avoid the indoctrination’ by Emma Burleigh

Novo Nordisk's Chief Financial Officer details the company's 'ultimate defense' strategy to prevent stock downgrades and legal challenges, aiming to maintain its leading position in the weight-loss market.By Eleanor Pringle

A leading analyst cautioned about a 'prisoner's dilemma' and an 'AI wobble' in the stock market shortly before Palantir appeared to validate widespread concerns.By Nick Lichtenberg

CEO Daily is compiled and edited by Joey Abrams and Claire Zillman.