Elon Musk’s feud with Donald Trump is hugely damaging to Tesla but don’t expect any action from the board

How should the company council respond to CEO public insult and reject the head of sitting?

It is not a question that needs to be taken into account, because few executives dare to criticize the White House directly. When executive managers speak against federal directions, their messages are usually delivered behind closed doors, or in a collective open message. But this week, Elon Musk changed all of this and forced the case in a long year with Donald Trump.

The couple had a significant decrease in Trump’s budget, and is also referred to as the “big beautiful bill”, on Thursday, which soon became a personality. Musk asked his followers on social media about whether it was time to create a new political party, and said that the Trump tariff would cause stagnation, and claimed that Trump’s name was in government documents about Jeffrey Ibstein, the convicted sexual perpetrator. “This is the real reason behind not announcing them,” Musk wrote.

The dispute was already expensive for musk and many of his works, including Tesla. The shares of the auto manufacturer stumbled with the back of the back and the news cycle, as it decreased by 14 % on Thursday, and the shareholders cost $ 150 billion. Analysts now warn that hostility with Trump may cost Tesla billions, given that Trump can cancel the tax credits of electric cars and other measures that have strengthened Tesla’s profits. The company can also face increasing regulatory obstacles around its autonomous autonomous vehicles, and technology aimed at pushing the future of Tesla and cited stock monitors as a reason for the performance of the continuous arrow of the eye. Dan Eve, Tesla Paul analyst and Widbush analyst talking about investors early on Friday when he wrote in a research note: “This needs to be calm.”

In an ordinary company, there is a strong opportunity because the events of the past few days will motivate a council to reject the CEO. But will the Board of Directors of Tesla launched a musk to protect public shareholders from possible damage?

Charles Elson, the founding director of the Winberg Center for Corporate Governance at Dilayer University, said the founding director of the Winberg Center for Corporate Governance at Dilayer University luck. “But they will not do.”

Quiet plate

SPAT TROMP-MUSK is the latest in a series of events that forced the issue of the role that Tesla has already played in the company.

“Over the years, musk behavior has become more impressive,” says Elson. “The council’s lack of response makes you wonder,” Who are these people? Why are they there? “

She has long faced criticism for being very close to musk, and therefore ready to overlook many management issues. For example, he agreed to the 2018 MUSK salary package of $ 56 billion, and witnessed a general silent behavior of disagreement by the CEO, which led to general protests and customers running out of the company. And the recent allegations about the echo reports of drug use in Musk that appeared in the past without the role of Musk.

There are some contributing factors about the reason for this. Musk is a controlled contributor to Tesla, with 22 % of the voting power, which makes it very difficult for the board members to obtain the necessary votes to force him to go out. Also, the council is in a difficult situation that the shooting of musk can wear stocks, bearing in mind that its name is closely related to the company.

Many managers also have closely close relationships with musk. This includes his brother Kimbal Musk, a businessman and owner of a restaurant, Joe Giba, the founder of Airbnb and a friend of Musk’s. There is no auto industry or senior executives for green energy in the group, and one may expect at an exemplary EV.

Managers are also pushed very well. This year, the Dilayer Court ordered the Board of Directors to return the wage to more than 900 billion dollars after it was found that it paid itself wonderfully. Robyn Denholm, Tesla Chairman since 2018, has received $ 600 million, much more than people with the same position in other companies. The court found that “the compensation was very important, as it was almost impossible to be independent managers.”

“It is difficult to make the man understand something when his salary depends on his lack of understanding,” says Nile Mino, a corporate governance expert, quoting Apton Senkler. “This is this council.”

Certainly, this year, there were signs earlier this year that Tesla managers were controlling more control of the company’s governance. Last month, Wall Street JournalIt stated last month that the board of directors had started searching for a successor and choosing a search company to help them. He also stated that the board of directors met with Trump for weeks before announcing that he would spend less time at the White House. It appears that it is between the reverse reaction against Tesla, which was raised by Musk’s focus on Washington, and the price of Tesla delivery, finally prompted the council to act.

But the Board of Directors denied the report directly, as Dunholm described it as “completely wrong.”

Can anything change?

Even taking into account the tendency of the conflict, the last ELON Musk dispute in its own category.

But the experts of the Board of Directors agree that a procedure from the Tesla Council is misleading. “There was a lot of” now the council had to do something moments, “Mino says, and they failed every time.” “I no longer feel something like” now they have to do something. “

There are technical methods that the shareholders can move the needle if they want to get out of musk. They can vote on directors outside the board of directors through the votes of the shareholder agent, and they hope that the new directors will launch musk. Or they may try to prosecute the painting because the musk is not kicked to the sidewalk when it endangers the brand to danger and divide its concentration between Washington and Tysella. But the shareholder who wanted to do this would need to own up to 3 % in the company, and Ann Lipton, Assistant Dean of Faculty Faculty Research at the Faculty of law at the University of Toulin, notes, and the laws of governance makes it impossible to do.

She said: “No shareholder will be able to show that this council is behaving with bad faith by not replacing Musk as an executive president, and he is really the level that they will have to show.”

In theory, it is still possible for the TESla Board Director to make a change through the Musk Go proposal. Elson says they must make peace with the loss of their roles.

“They will say, look, I will vote to move it. If I lose, I leave. I can’t do it anymore,” says Elson. Whether they will do this depend on whether they are two principles, or “add or” people comfort “.

“We will have to see,” he said.

This story was originally shown on Fortune.com

2025-06-07 06:00:00