Musk to workers: Perform for profit, prove 'naysayers wrong'
Tokyo: Tesla founder Elon Musk is telling his employees to work hard on the last day of the quarter to prove "the naysayers wrong." In a Sept. 30 email, filed with the U.S. Securities and Exchange Commission on Monday, Musk said the electric car maker is nearing profitability.
The commission had filed a lawsuit last week, saying Musk's tweet in August about taking the company private constituted securities fraud because Musk knew he hadn't lined up the money for the deal.
Musk reached a settlement with the regulators, announced Saturday. He is staying on as CEO, but gives up his chairmanship. The complaint had sought his removal as chief executive as well. Musk and Tesla will each pay 20 million to resolve the case.
"We are very close to achieving profitability and proving the naysayers wrong, but, to be certain, we must execute really well tomorrow (Sunday)," Musk's email said.
"If we go all out tomorrow, we will achieve an epic victory beyond all expectations. Go Tesla!!!" Tesla stock has been fluctuating since the August tweet. Tesla has racked up deep losses, announcing in August a record 717.5 million net loss for the previous quarter.
To understand how Musk will be affected by the government ruling, here's what sets CEO and chairman roles apart and how Musk's duties might change from this point forward.
A CEO is a company's top decision-maker and serves as the public face of a company. This post is responsible for the company's overall performance and commitment to its internal and external stakeholders, former P&G CEO and current Snap board director Alan George Lafley writes in Harvard Business Review.
The CEO, writes Lafley, decides which business the company is and isn't in, shapes its values and balances the investments the company makes in both the present and the future.
A study tracking CEO time from two Harvard researchers found that chief executives spend 25 percent of their time speaking to others and building relationships, 25 percent on functional and business unit reviews, 16 percent on organization and culture, and 21 percent on strategy. A bulk of these work-tasks often take place during meetings.
Dedicating himself solely to being Tesla's CEO may help Musk regain control of his company's daily operations and focus less on shareholder demands. Musk, a hands-on leader, has been known to put himself on the production line to help Tesla through its manufacturing sprints, unusual for a CEO.
A company board chairman, who's responsible for the other board members, works on counseling and supervising a company's management team, management expert Stanislav Shekshnia writes in Harvard Business Review.
While more than half the chairs of the S&P 500 double as their companies' chief executives, researchers have found that the two roles depend on completely different traits. While CEOs thrive on "crafting a vision, making bold moves, appointing people, giving orders, assuming responsibility and setting examples," a chairman should show restraint, patience and availability to arrive at conclusions that appease shareholders.
Musk has served as a Tesla board chairman for the last 14 years, and as a result, several shareholders have urged the carmaker to add independent board directors without ties to Musk as a way to "provide a critical check on possible dysfunctional group dynamics."
This summer, shareholder Jing Zhao said that Musk himself should be replaced by an independent director, explaining that his double-duty was more appropriate during the company's early days.
"In this much more highly competitive and rapidly changing technology industry, it is more and more difficult to oversee Tesla's business and senior management (especially to minimize any potential conflicts)," the shareholder wrote.
The board voted against that proposal, tying the company's success to Musk's dual role.
Said the company at the time, "The Board believes that it is precisely during times when a company must quickly adapt to constant change and outside pressures that Board leadership needs to be lockstep with the Company's operations."