Tesla reported strong earnings yesterday and CEO Elon Musk continued to pump up his fans. (Raise your hand if you want preorder that flying car.) I walked away from its third-quarter earnings call with a more existential question: What does it mean to be a public company?
Many companies now avoid going public. They are so put off by the extra scrutiny, investor demands, and thickets of regulations that the number of listed companies in the U.S. is half what it was in the mid 1990s.
Not Tesla. Musk’s stake in the automaker is what made him the world’s richest man. And he is the main reason why most investors own Tesla stock.
But this is not how a public company is meant to operate. On Tesla’s message board soliciting shareholder questions prior to the call, the dominant concern was Musk’s controversial rhetoric and tactics in supporting Donald Trump. Many question the legality of Musk’s $1 million-a-day giveaway for voters and his inflammatory posts on X.
But analysts on the call did not question Musk’s behavior or ask whether the Tesla chief would have to step down to lead a so-called Department of Government Efficiency (DOGE!) in a Trump Administration.
Maybe next time, shareholders!
Don’t expect the board to hold Musk accountable. When a Delaware court voided Musk’s $56 billion pay package earlier this year as “unfathomable,” chair Robyn Denholm dismissed the findings as “crap.” Instead of reiterating the board’s fiduciary duty, she supported reincorporating in Texas to “fix this issue, which is a matter of fundamental fairness and respect to our CEO.” Even if you support Musk’s pay, as these academics did, that’s not a board that puts investors first.
Musk acts like shareholder value is beyond his control. He has compared leading a public company to “living in your house and some crazy manic-depressive guy comes and stands outside your house and yells property prices at you, so it ends up (being) a different price every day.”
And he treats Tesla shareholders less like owners than fans, with statements like “I love you guys” — more common for a boy band than a boardroom. When more than 40% of your shares are held by individual investors, maybe that’s to be expected. But the board ought to make sure its celebrity CEO is boosting the brand and the share price — not his personality cult.
More news below.
Diane Brady
diane.brady@fortune.com
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This edition of CEO Daily was curated by Joey Abrams.
