This is the founder-capitalist answer to America’s institutional rot. Boeing gave us committees, process, independent directors, safety theater, Starliner embarrassment, and the 737 MAX disaster. SpaceX gave us reusable rockets, Starlink, Starshield, American launch dominance, and Starship putting 45 tons into orbit. The difference is not accidental. Governance shapes culture. Culture shapes results. Musk’s compensation package is insane only because the mission is insane: trillion-dollar value creation, Mars colonization, and off-Earth compute infrastructure. Good. Let the activists cry. Let Delaware sulk. Let ISS and Glass Lewis choke. SpaceX just buried the shareholder-activist parasite class in Texas dirt.
I marvel at Our Host's ability to study, analyze and distill into comprehensible (to us) terms the most arcane minutiae of high finance and corporate governance. My ability to understand such things begins and ends with my monthly banking statements. Having said that, I am left with this question: What happens when Musk departs (dies)? Can the entire Musk portfolio of companies be expected to continue as he contemplates in these founding documents or will it, in the fashion of all such endeavors eventually degenerate into the typical mess of competing interests that gave us the Boeing collapse? Or will it persist in the fashion of Apple post-Jobs? After all, nothing made by the hand of Man has ever lasted into perpetuity, nor can it. (I grant the pyramids are still around but the society that produced them is long gone.) I ask this only hypothetically because I don't expect to be around when these issues come to the forefront, since Musk is quite a bit younger than I and as long as he has his hand on the tiller, his businesses remain quite literally his business.
So, if there is no performance on agreed upon transparent metrics that benefit all shareholders, there’s no bonus for Musk. Tell me why we can’t use a similar approach with our elected officials, who solve NO problems but all seem to grow rich dedicating their lives to “public service.”
Agreed. However the irony is that those same elected "officials" would have to approve their compensation switch to merit-based metrics, i.e., "I can't get hurt if I'm wrong or do nothing" to "Holy s**t I'd better take my job seriously otherwise I'll lose it."
This is the founder-capitalist answer to America’s institutional rot. Boeing gave us committees, process, independent directors, safety theater, Starliner embarrassment, and the 737 MAX disaster. SpaceX gave us reusable rockets, Starlink, Starshield, American launch dominance, and Starship putting 45 tons into orbit. The difference is not accidental. Governance shapes culture. Culture shapes results. Musk’s compensation package is insane only because the mission is insane: trillion-dollar value creation, Mars colonization, and off-Earth compute infrastructure. Good. Let the activists cry. Let Delaware sulk. Let ISS and Glass Lewis choke. SpaceX just buried the shareholder-activist parasite class in Texas dirt.
I marvel at Our Host's ability to study, analyze and distill into comprehensible (to us) terms the most arcane minutiae of high finance and corporate governance. My ability to understand such things begins and ends with my monthly banking statements. Having said that, I am left with this question: What happens when Musk departs (dies)? Can the entire Musk portfolio of companies be expected to continue as he contemplates in these founding documents or will it, in the fashion of all such endeavors eventually degenerate into the typical mess of competing interests that gave us the Boeing collapse? Or will it persist in the fashion of Apple post-Jobs? After all, nothing made by the hand of Man has ever lasted into perpetuity, nor can it. (I grant the pyramids are still around but the society that produced them is long gone.) I ask this only hypothetically because I don't expect to be around when these issues come to the forefront, since Musk is quite a bit younger than I and as long as he has his hand on the tiller, his businesses remain quite literally his business.
Thank you for distilling this down for readers Alex. Another very informative piece.
Hear! Hear!
So, if there is no performance on agreed upon transparent metrics that benefit all shareholders, there’s no bonus for Musk. Tell me why we can’t use a similar approach with our elected officials, who solve NO problems but all seem to grow rich dedicating their lives to “public service.”
Agreed. However the irony is that those same elected "officials" would have to approve their compensation switch to merit-based metrics, i.e., "I can't get hurt if I'm wrong or do nothing" to "Holy s**t I'd better take my job seriously otherwise I'll lose it."
True. It’ll never happen.
Brilliant, thank you.
Thank you for the Apple example. 'Nuff said.
Very astute observations, Alex. Thanks for the deep dive.