Elon Musk, CEO of Tesla Motors, unique even among corporate crooks

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Meet Elon Musk, the CEO of Tesla Motors. Even among the top 100 compensated CEOs of last year - as disclosed on the AFL-CIO's latest Executive Paywatch - he's unique.

Musk, you see, is the perfect argument for why these corporate crooks don't deserve one red cent, or even their jobs.

Last year, according to its own filings with the federal government, Tesla, a maker of supposedly "green" vehicles, had $2 billion in revenue. It also lost $74 million. You would think that with a record like that, Tesla's board would show Musk the door, with or without a "golden parachute." And you would be wrong.

Instead, the paywatch report notes, Musk earned - if that's the right word - a combined $78.15 million in pay, bonuses and compensation. In other words, had Tesla paid Musk his true value - zero - it would have turned a profit.

Musk is only the most extreme example of the overcompensated corporate crook running U.S. companies. The list of the top 100 such bozos is on the paywatch website.

(It doesn't include leaders of non-profit associations and organizations, however. Otherwise, NFL Commissioner Roger Goodell would finish 12th on the paywatch list: He took home $44 million.)

Musk isn't the only malefactor. There are others:

McDonald's CEO James Skinner earned $27.74 million. He's among the top 100. McDonald's workers get paid the minimum wage of $7.25 an hour - if they get paid at all.

McDonald's workers took to the streets of Manhattan and 30 other cities last month to protest the firm's "wage theft" - the fast food giant's denial of correct wages and refusal to pay overtime when they toil more than 40 hours a week. Seven groups of McDonald's workers in New York, California and Michigan are suing the firm in class action cases for such wage theft.

Then there's Jamie Dimon, the CEO of JP Morgan Chase - yes, one of the big financial institutions that brought us the 2008 crash, and that we bailed out with taxpayer dollars. Dimon took home $18.72n million last year. The bank netted $35.6 billion on revenues of $106.28 billion - a 33 percent profit. Sounds great for investors, right?

Well, not if you look at how JPMorgan Chase did it. In just the latest instance of its lawbreaking, the bank, in February, had to settle for $300 million in fines in New York courts. It seems JPMorgan Chase was taking kickbacks in exchange for steering homebuyers into overpriced mortgages they couldn't afford. Those were the mortgages whose collapse triggered the crash.

James McNerney of Boeing earned $23.26 million. All he did was openly break labor law by deliberately moving production of the 777 Dreamliner to anti-union, anti-worker South Carolina in retaliation against the Machinists for sticking up for their members in the Pacific Northwest. The NLRB had to go after Boeing.

All of this, plus the outrageous gaps in pay between the CEOs and the rest of us, tells us two things. The first is that Dimon, Musk, McNerney, Goodell, Skinner and their ilk aren't worth a penny.

But the second is that the whole system is rotten. A process that rewards corporate crooks who leech their loads of cash off the backs of those who really produce the goods, services and profits that make this country go is a process - and a system - that must be overhauled, if not totally scrapped.            

 

 

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  • Numbers for 2013 are out for Musk, he earned minimum wage($33,280 in cash) plus $36,709 in stock options.



    @Alex -

    "Tesla may have made a profit on a non-GAAP basis, but it only did so, according to Bloomberg, by eliminating the costs of its creative leasing system, the repayment of its DOE loan, the stock "bonus" payments to Musk himself, as well as another several million in expenses, from its operating expenses. "

    There are no "costs" to their creative leasing. Tesla gets 100% of the money upfront and the financing is handled by a 3rd party. But GAAP does not let them file it all at once so they have to break it up by the month. Paying back the DOE loan is part of doing business. And stock options are have no cost to the company, it just dilutes the stock.


    "I have a hard time imagining any corporation that couldn't make a profit, if they are free to arrange their books so that their expenses "don't count". Even ENRON made profits when they did their books sufficiently carefully (not that I'm actually comparing Tesla itself to ENRON, just the use of creative bookkeeping). "

    Just so you know, ENRON was profitable on a GAAP basis.(or so it was according to ENRON). Thus ENRON broke SEC rules and paid for it. You can go look at Tesla's financials yourself via SEC and Tesla's own site. There is no creative bookkeeping or anything of that sort. It has more to do with the views of the reporters and how they wish to frame it. At the time, it was popular to bash Tesla so that is what they did, now as Tesla's popularity is rising, Bloomberg turned a 180. That is what media does, they beckon towards their viewers. If you want real financing, read the SEC reports yourself.


    "Ironically, the profit Tesla showed by leaving things like the "bonus" stock payments to Musk off its books, most likely contributed to the rise in the value of the stocks, and thereby inflated the value of that "bonus" stock itself. "

    The cost would never be on the books by any accounting mechanism. Because it is not an expense to the company. All it does is dilute shares. The stock options were noted in advanced in SEC filings and were actually given prior to the stock going up. The reason the options are so high is because the stock went up by so much.

    Posted by Weapon, 04/24/2014 7:48pm (3 months ago)

  • Congratulations! The real question is why you get paid to spew complete nonsense criticizing the people who make this world go around. Musk has done more for the world than Steve Jobs ever dreamed of. Anything and everything you write in the future will have absolutely no credibility with readers if you keep up this idiocy.

    Posted by John, 04/23/2014 7:19pm (3 months ago)

  • Tesla may have made a profit on a non-GAAP basis, but it only did so, according to Bloomberg, by eliminating the costs of its creative leasing system, the repayment of its DOE loan, the stock "bonus" payments to Musk himself, as well as another several million in expenses, from its operating expenses.

    I have a hard time imagining any corporation that couldn't make a profit, if they are free to arrange their books so that their expenses "don't count". Even ENRON made profits when they did their books sufficiently carefully (not that I'm actually comparing Tesla itself to ENRON, just the use of creative bookkeeping).

    Ironically, the profit Tesla showed by leaving things like the "bonus" stock payments to Musk off its books, most likely contributed to the rise in the value of the stocks, and thereby inflated the value of that "bonus" stock itself.

    I suppose that's one way to "earn" one's "pay".

    Posted by Alex, 04/23/2014 4:38pm (3 months ago)

  • The data that is referenced is from 2012. That was the first year Tesla start producing the Model S. Of course they had a loss! They were, in fact, profitable much earlier than predicted in 2013. Not that any of this is relevant in such a poorly written article.

    Elon Musk does not have a "job" at Tesla, he IS Tesla. It is the company he started with his own money. The $78M claimed in this article (mostly stock he has not sold), is chump change compared to the $5B of wealth he has created for himself by executing flawlessly in one of the most challenging startups in business history. He also created a few thousand jobs, but I guess this does not count since they are not part of a union.

    Take off your blinders and do your homework before you embarrass yourself again with another poorly written piece.

    Posted by DB, 04/23/2014 4:01pm (3 months ago)

  • Elon Musk should sue you for slander for calling him a corporate crook!

    Posted by CGriffin, 04/23/2014 1:39pm (3 months ago)

  • This blogger is so far off. He has no idea that Musk put more than half of his fortune into this company. Musk is the only reason that Tesla is in business today(for many reasons). Musk deserves anything he gets. His vision for saving the planet and ethics are unmatched By any other CEO. He does not believe that it is right to make money on service. Service makes up for more than 40% of other car manufacturers revenue. Do not write anymore ignorant posts. Especially about someone who could quite possibly be saving your life in some regard. He is advancing the advent of electric vehicles by well over ten years. All while fighting other CEOs and politicians (real crooks) who don't want him to succeed. I suggest you write an apology for your ignorance and calling Musk a crook. You should instead call him a hero.(get on the right side of history and support this man not be little his success that you are jealous of)

    Posted by Matt, 04/23/2014 9:44am (3 months ago)

  • What an idiotic article . This article proves what a person with more time than sense can accomplish . A big Nothing .

    Posted by Jack, 04/23/2014 12:42am (3 months ago)

  • While I completely agree that many CEOs are completely overpaid. Musk is a very poor example to use.

    For one, Musk salary is 1 penny. The 78.15 million is in stock options. Had Tesla paid him 0, Tesla would be 1 penny richer.

    Now the only reason why his compensation is worth 78.15 million is stock options is because of Tesla's stock value.

    The stock options were given to Musk as compensation for hitting targets pre-agreed on prior. Keep in mind Musk almost went bankrupt trying to keep Tesla alive long enough to reach this point. He had to even sell his house and go live with friends to make ends meet at one point.

    Also, Tesla was actually profitable in 2013. They did not show a profit on a GAAP basis but they showed millions in profit on a non-GAAP basis.

    And lastly, Musk is the board of directors in Tesla. Unlike most other companies which are run by professional CEOs for hire, Musk owns the most stock of anyone in Tesla, he has the power to veto any vote as well.

    Anyways, you can't compare a CEO like Musk who brought the company up from nothing himself putting everything he had into it on the same level as McDonalds and JP Morgan CEOs who can be replaced by anyone with the same result.(And I am sure they both bet more than a 1 penny salary).

    If Tesla fails, that 78.15 million turns to 0, no golden parachute. If Tesla succeeds more it will grow even more. If McDonalds or JP Morgan fail, they get a golden parachute and move to a different company.

    Posted by Weapon, 04/22/2014 7:22pm (3 months ago)

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