Tesla, Intel and the fecklessness of corporate boards
Subscribe to enjoy similar stories. Sitting on the board of a large American company is at once the plummest and most thankless work in business. Plum because, when everything is going right, you pocket $300,000 a year in cash and stock for showing up to a well-catered meeting every month and a half.
Thankless because you seldom get credit for things going right but take the blame when they go awry. And awry they go with disturbing regularity. Consider two recent events.
On December 2nd directors of Intel sacked its hapless chief executive, Pat Gelsinger. He had torched $150bn in shareholder value over his three-and-a-half-year tenure at the chipmaker, even as the fortunes of virtually all other chip firms were boosted by white-hot demand for computing power amid the artificial-intelligence (AI) revolution. Good riddance, then.
But what took the board so long? The same day, a judge in Delaware reaffirmed her ruling from January to annul the eye-watering $56bn compensation package awarded in 2018 to Elon Musk by the board of Tesla, his electric-car company. The decision is controversial. Tesla’s shareholders have minted it lately thanks to the soaring price of the company’s stock.
In June 75% of them voted to bless the mega-paycheque (and move the company’s incorporation from Delaware to management-friendlier Texas). Tesla called the latest ruling “wrong" and will be filing an appeal. Still, the imbroglio is a reminder that Tesla’s notionally independent directors who signed off on Mr Musk’s windfall were, in a judge’s opinion, anything but.
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