~6 0~p>WSJ journalists discovered that some top managers of Elon Musk's companies not only knew that he used drugs, but were directly involved.
Tesla board members made hundreds of millions in stocks and individual investments, and some of them used drugs along with Elon Musk.
The Wall Street Journal claims this. TSN.ua offers you an abbreviated translation of the article.
Top managers and drugs
The publication writes that longtime Tesla executive and venture capitalist Steve Jurvetson has left the company after an internal investigation found that he slept with several women in the technology industry and used illegal drugs.
WSJ sources familiar with the situation said some of the details were reported in the press in 2017, and Tesla directors informally discussed how they should handle it, with some calling for him to resign.
“Fortunately, Jurvetson, although the company appointed him as an independent director, had a good friend with whom he had deep financial ties and also attended parties using ecstasy and LSD: Mask”, – the article says.
The publication claims that, according to its sources, Musk pushed directors in private conversations to allow Jurvetson to take an unusual leave of absence and then resign of his own free will in 2020 . Jurvetson is still director of Musk's private rocket company SpaceX.
“The answer was do nothing and see what happens,” said another former Tesla independent director and good friend of Musk, Antonio Gracias, in a 2021 court deposition when asked how the board handled the Jurvetson situation. < /p>
Gracias and his venture capital firm recently invested about $1.5 billion in Musk's companies, the article notes.
It notes that several other directors of Musk's companies have deep personal and financial ties to the billionaire entrepreneur and have profited enormously from those relationships.
“The ties are extremely blurred between friendship and wealth and raise doubts among some shareholders about the independence of the board members tasked with overseeing the chief executive. Such conflicts may run afoul of the lenient rules governing qualifications for independence in public companies,” writes the WSJ.
The publication gives an example of Nasdaq rules, where Tesla is traded, according to which an independent director cannot be an employee, family member or person whose relationship “would interfere with the exercise of independent judgment.”
On January 30, a Delaware judge overturned Musk's multibillion-dollar Tesla pay package, saying the board members who signed it in 2018 were beholden to Musk.
According to the publication, several current or former directors of Tesla and SpaceX attend parties with him, go on exotic vacations and hang out at the Burning Man art and music festival in Nevada.
The WSJ also notes that Musk and these directors, including venture capitalists Gracias and Ira Ehrenpreis, tech mogul Larry Ellison, former media executive James Murdoch, and Musk's brother Kimbal Musk, have invested tens of millions of dollars in each other's companies. In particular, Ellison owned billions of dollars in Tesla shares with a stake of about 1.5% in 2022, and some of them received support and career help from Elon Musk.
“Most of Tesla's current eight-member board have amassed hundreds of millions of dollars worth of stock over the years, significantly more than board members of other companies receive for their services,” the article says.
The publication clarified that Tesla pays its directors primarily with stock options, and the current board of directors, not counting Musk himself, earned over $650 million from the sale of shares. In addition, they hold approximately $1 billion in additional options.
Some directors agreed to return some of that compensation to Tesla to resolve a shareholder lawsuit over their compensation, denying any wrongdoing. A judge must still approve the agreement,” the article says.
The average compensation for board members at the 200 largest U.S. companies was $329,351 in 2023, according to a new report from the National Association of Corporate Directors and compensation consultant Pearl Meyer, the publication reports. Meanwhile, current Alphabet board members own shares valued at approximately $8 million and have received average annual board compensation of approximately $475,000 since 2015.
In addition to their salaries, some directors of Tesla and SpaceX have tens of millions of dollars of additional investments in Musk's companies, including his brain implant startup Neuralink and the tunnel construction company The Boring Co, writes WSJ.
Musk also invests in the companies of some directors. In addition, members of the wash have invested in Kimbal Musk's Kitchen Restaurant Group and in SolarCity, a company run by Musk's cousins and acquired by Tesla, the article reported.
“Governance experts such as longtime board members and board advisers say personal and financial ties can confuse directors' views in ways that are highly unusual for U.S. public companies,” the publication said. .
While the rules governing independent directors across the country are murky, courts have sometimes found public companies guilty of claiming independent directors even though they had related investments, the newspaper noted.
According to him, Amalgamated Bank, which oversaw investments in Tesla amounting to about $180 million as of September, last year signed a letter to a shareholder asking Tesla board members to increase “meager oversight ” behind Musk.
WSJ claims that according to people who have witnessed or reported drug use, some current and former directors of Tesla and SpaceX are aware of Musk's illegal use of certain substances but have not made public measures
In January, The Wall Street Journal reported that Musk used drugs, including cocaine, ecstasy, LSD and mushrooms, and that Tesla and SpaceX executives were concerned about this, especially his recreational use of ketamine, for which Musk said he has a prescription. . Moreover, illegal drugs violate Musk's companies' strict anti-drug policies and could jeopardize SpaceX's federal contracts and Musk's security clearance.
According to the publication, people with knowledge of drug use and partying claim that in recent years Musk has attended social gatherings with Tesla board member Joe Gebbia, co-founder of Airbnb and his friend, in at the elite Austin Proper Hotel, where he took ketamine via nasal injection several times. spray.
Also, witnesses to Musk's drug use and other people aware of this claim that other directors – Gracias, Jurvetson and Kimbal Musk – used drugs with him, writes WSJ.
The article also reports that Musk and some people close to him attend parties at Hotel El Ganzo, a boutique hotel in San Jose del Cabo in Mexico, known for its art and music scenes, as well as drug-fuelled events. .
Some of these people say the level of drug use by Musk and board members is alarming, the newspaper writes. Also, some of them claim that some of Musk's friends, including directors, believe that they should use drugs with him, since the content could upset the billionaire who made them a lot of money.
“What's more, they don't want to risk losing the social capital gained from being close to Musk, which for some is like being close to a king,” the WSJ states.
The article notes that Musk and his lawyer Alex Spiro did not respond to requests for comment.
After the January WSJ article about Musk's drug use, Spiro stated that Musk “is routinely and randomly drug tested at SpaceX and has never failed a test.”
Musk himself wrote on social network X that in three years of drug testing after a weed-smoking incident in 2018, “not even traces of any drugs or alcohol were found,” and WSJ “It's no good sending them a parrot cage.”
Later, he also wrote on this social network: “If drugs really helped improve my net productivity over time, I would definitely use them!”
Tesla's general counsel and a SpaceX representative did not respond to WSJ requests for comment.
Ellison's proposal
According to people close to Musk, some board members are concerned about the negative consequences of Musk's behavior on the six companies they manage and on the approximately $800 billion in investor assets, the newspaper claims. However, despite this, Tesla's board did not investigate his drug use or mention its concerns in official board minutes, which may become public.
“Around the winter of 2022, Musk's good friend and former Tesla board member Ellison encouraged him to come to the Hawaiian island to take a break from work and get sober from drugs, people familiar with the proposal say,” the WSJ article said.
The publication explains that some people say Ellison suggested this to Musk when friends and others close to him were concerned about his increasing drug use and some were asking him to go to rehab.
Around this time, Musk attended a party in the Hollywood Hills, where he drank a liquid form of ecstasy from a water bottle, a person who was at the party told WSJ. The publication writes that Musk's guards asked people to leave on top of the house where he was before he took the drug.
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CEO with freedom of action
Some directors view Musk as “a unique genius with a brilliant mind and unusual methods,” writes the WSJ. In courtroom testimony, they said they view Musk's leadership as critical to both Tesla and SpaceX and believe in his long-standing mission to colonize Mars. Tesla shares have risen more than 300% over the past four years, but are down about 25% since early January.
Company directors often allowed Musk an unusual amount of leeway in matters large and small, the article notes.
“For example, after he bought Twitter in 2022, Musk turned to Tesla employees to test the social media platform's engineering talent. Around the same time, SpaceX signed an unusual $1 billion loan to its chief executive,” writes WSJ.
Musk's loose comments on Twitter, now X, and in interviews have caused instability in Tesla's stock price and affected his other companies. Last year, major companies stopped advertising on X after he called an anti-Semitic post on the social network the “true truth,” the publication recalls.
Surrounded by friends
He also states that, while building his business empire, Musk has long surrounded himself with close friends. He turned to them for advice on new business ventures and daily operational assistance.
In addition to Musk, Tesla’s board of directors includes his brother Kimbal, who previously served on the board of directors of SpaceX and advised his relative on numerous projects, in particular the launch of OpenAI and Neuralink. She and Elon Musk are also close personally, often attending the same events and parties, writes WSJ.
The publication also claims that Ehrenpreis, who heads two of the four committees on Tesla's board of directors, is recognized by the company as independent, but has been close to Musk for many years. He had the right to buy the first Tesla Model 3, and in 2017 he gave it to Musk for his 46th birthday.
Ehrenpreis, personally or through his venture capital firm DBL Partners, has invested in many of Musk's businesses, totaling about $70 million. On the Tesla board, he earned more than $220 million in stock sales and has additional options worth more than $200 million at recent prices, the article reported.
James Murdoch, a former executive at 21st Century Fox, is also classified as an independent by Tesla. His friendship with Musk began around 2006; they vacationed as families, including trips to Israel and Mexico, writes WSJ. During court testimony in 2022, Musk said that he did not know Murdoch well, although Murdoch confirmed his friendship with Musk in preliminary testimony, the publication noted.
Murdoch, the youngest son of Rupert Murdoch, the emeritus head of News Corp, which owns The Wall Street Journal, said in court that he considers himself independent, the article says.
WSJ writes that he invested $20 million in SpaceX, according to court records, and a company he controlled invested about $50 million in the space company.
Robin Denholm, considered independent, lives in Australia and does not communicate with Musk. She said in court that he has no personal investments in Musk's other companies. Her ten-year position on Tesla's board of directors was lucrative, earning her more than US$625 million in equity in the company. Denholm exercised about half of her options, netting a profit of more than $280 million on sales, the newspaper reported. She holds the Tesla board meeting as an informal family event, the article says.
According to one WSJ source, Musk sometimes showed up to these meetings two hours late or hours early, and then blamed his employees for not getting him there on time.
The idea of Denholm keeping an eye on him was “unrealistic” given his status as the company's largest shareholder, Musk said in an interview, adding: “I can just call for a shareholder vote and do whatever I want.” Musk later tweeted that 60 Minutes edited his interview in a deceptive manner.
Joe Gebbia, co-founder of Airbnb and friend of Musk, joined the Tesla board in 2022, lives in Texas and has been appointed an independent director.
Former Walgreens Boots Alliance executive Kathleen Wilson-Thompson, who joined the board in 2018, is considered independent and has no public ties to Musk, the article also said.
Ellison, co-founder and current chief technology officer of Oracle, was appointed as an independent director and served on Tesla's board of directors from 2018 to 2022. He said that he was a very close friend of Musk, and repeatedly received him on the Hawaiian island of Lanai, writes WSJ.
When Musk unveiled his plans to acquire Twitter, Ellison pledged $1 billion in 2022 while on Tesla's board to help finance the acquisition, surpassing the investment of many of the venture capital firms involved in the deal , the publication reports.
Another Tesla director, whom the company classified as a senior independent director from 2010 to 2019, has been a close friend of Musk for more than two decades, the article notes.
“Musk turned to Gracias for support after his young son died in the early 2000s, according to a 2021 court opinion,” the WSJ claims. The publication also writes that he is one of Musk's friends who attend private parties around the world and sometimes use illegal drugs with Musk.
“During court testimony in 2022, he called Musk “extraordinary,” an “amazing engineer,” and a “product genius.” During his work on the board of Tesla, he earned more than $100 million by selling the shares he earned,” the article says.
When asked during court testimony whether his close friendship and business relationship with Musk affected his ability to act as an independent director at Tesla, specifically Musk's salary in 2018, Gracias said no, WSJ writes. Gracias resigned from Tesla's board of directors after more than a decade in 2021 in response to pressure to improve corporate governance. He remains director of SpaceX.
“Jurvetson is one of Musk's closest friends, and the two have been mixing friendship and business for years. Jurveston was the first investor in SpaceX, and they used LSD and ecstasy together,” the publication claims.
According to him, Jurvetson often hosts Elon and Kimbal Musk at parties at his home in Half Moon Bay, a small beach town south of San Francisco.
Jurvetson made more than $9 million by selling Tesla shares he received as a director before leaving the board in 2020, according to documents reviewed by the WSJ.
Former Tesla board member Linda Johnson Rice, who was not close to Musk or other directors outside of work, did not run for re-election to the board in 2019 after serving for less than two years due to frustration with Musk's erratic behavior, including his drug use, the newspaper alleged. .
According to him, she informally asked whether the board should conduct an investigation, but her proposal was rejected.
“She served her time and that’s it. No negativity with Linda!” Musk wrote in X about Rice after a January WSJ article about his drug use.
Similarly, Hiromichi Mizuno, former chief investment officer of Japan's Government Pension Investment Fund, left Tesla's board of directors in 2023 after three years. Mizuno found that the board operated more like a family company rather than a public company with strict rules and regulations.
He was used to avoiding close relationships with others in the workplace in order to remain objective. Although Mizuno was sometimes invited to drink with Musk, he never attended his private parties or events,” the article says.
The WSJ also recalls that Musk, who owns 13% of Tesla, recently wrote in X that he was uncomfortable turning the electric vehicle giant into a leader in artificial intelligence and robotics without controlling about 25% company.
The tweet was effectively an ultimatum for Tesla board members to reconsider his compensation following a Delaware court ruling to cut his salary, the publication claims.
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