Elon Musk is building a form of capitalism that Adam Smith would hate
THE ECONOMIST — In June the company went public very much on Mr Musk’s terms. Its initial public offering sold stock to the public without giving the public any meaningful governance rights.
Mr Musk kept roughly 85% of the votes, locked in through super-voting shares that can pass to his heirs through trusts. Buyers of the ordinary stock must waive their right to a jury trial and to bring class actions.
The company qualifies as a “controlled” one, which exempts it from the rule that a majority of its board be independent, and Mr Musk can be removed only by a vote of the share class he himself controls. Months earlier, shareholders of Tesla, his electric-car company, had handed him a pay package worth up to $1trn, whose real prize was voting control rather than cash.
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