Tesla executives suspected of using banned substances with Elon Musk
Steve Jurvetson, Tesla's longtime chief executive and venture capitalist, has left the company after an internal investigation uncovered illegal drug use and complicated relationships with multiple women in the tech industry.
Tesla executives discussed informally how to handle the issue in 2017, according to insiders, with many advising Jurvetson to resign. The source also said Jurvetson and billionaire Elon Musk were close friends and had both attended parties where ecstasy was used.
Musk privately talked to directors to allow Jurvetson to take an unusual leave of absence from the company’s board. Jurvetson later resigned in 2020 but remains a director at SpaceX.
Previously, WSJ reported that Elon Musk had used drugs including cocaine, ecstasy, LSD, magic mushrooms... This caused concern among leaders at Tesla and SpaceX, especially the recreational use of ketamine, which Musk said he was using on prescription.
These illegal drugs violate strict anti-drug policies at Musk’s companies, which could put SpaceX’s contracts at risk.
Billionaire Elon Musk (Photo: Tesla).
A source revealed that in recent years, Musk attended social gatherings with Tesla board member Joe Gebbia, Airbnb co-founder and a friend of his. These meetings often took place at the high-end hotel Austin Proper (USA), where Musk repeatedly took ketamine for recreation.
According to WSJ 's own sources, other directors Gracias, Jurvetson and Kimbal Musk also used drugs with Musk.
Not only that, Musk and some close associates also regularly attend parties at Hotel El Ganzo, a hotel in Mexico known for drug-related events.
The source also said that some friends, including directors, often used drugs with Musk because they thought that refusing could make the billionaire feel uncomfortable. Moreover, they did not want to risk losing the benefits they had from this billionaire.
Responding to a WSJ article in January about Musk's illegal drug use, Elon Musk's attorney, Alex Spiro, said Musk is routinely and randomly tested for drugs at SpaceX and has never tested positive for drugs.
Tesla's lawyer and SpaceX spokesperson also declined to comment to the press.
Elon Musk's ridiculous compensation figure
Recently, the court rejected Musk's billion-dollar compensation package at Tesla on the grounds that the board members who signed the 2018 compensation package were all indebted to Musk.
Specifically, a judge in the state of Delaware (USA) has ruled to invalidate the record compensation package worth more than 50 billion USD that electric car company Tesla gave to CEO Elon Musk. She said that this compensation package is an unbelievable number and unfair to shareholders.
At Tesla, Musk does not receive a salary or direct bonuses. Under a 2018 shareholder agreement, he will receive an income package that includes options to buy 304 million shares through 2028 if Tesla meets its revenue and market capitalization targets.
Musk has now received all 12 tranches of options. However, he has not exercised any of them. Once exercised, the billionaire will have to hold the shares for five years before selling them.
Musk's purchase price was $23.33 per share, much lower than Tesla's current $185 per share price range.
Judge Kathaleen McCormick of the Delaware Court of Justice said that Tesla's board members were either close to Musk or had no independent say in the compensation package.
“These people believed in Musk’s optimistic statements and his celebrity. They never asked themselves whether the compensation package of more than $50 billion was really necessary to retain Musk and achieve business goals,” the judge said.
The court has rejected Musk's multi-billion dollar compensation package at Tesla (Photo: Crast).
Tesla’s board has been criticized for failing to monitor its impulsive, foul-mouthed, and combative CEO. Musk has repeatedly clashed with U.S. officials and gotten his companies into trouble.
This lawsuit was initiated in 2018 by Tesla shareholder Richard Tornetta. At the end of 2022, during a hearing, billionaire Elon Musk said that the remuneration would be used to fund the space project.
“Tesla can help put humans on Mars,” he said.
According to Tesla's board of directors, this payment level is to ensure that Musk is fully dedicated to the company. Mr. Antonio Gracias, a member of Tesla's board of directors from 2007-2021, also called this compensation package a great deal for shareholders.
Notably, Musk's compensation package is the largest in American corporate history. This figure is equivalent to 25% of his assets, according to Forbes calculations. Musk is currently the second richest person in the world , with assets of more than 198 billion USD.
The ruling comes at a time when Tesla is experiencing slowing growth. Experts say the electric vehicle industry is in the midst of a demand adjustment. Tesla has become the world’s most valuable automaker under Musk, but much of that value is based on expectations of future technological breakthroughs.
Financial ambiguity
Not only that, but Tesla and SpaceX board members, despite being designated as independent directors, have invested millions of dollars in Musk’s companies, including both their own money and money they control.
According to sources, several current and former executives at Tesla and SpaceX attend parties with Elon Musk, enjoy exciting vacations and hang out at clubs, music and art festivals in Nevada.
Musk, along with venture capitalists Gracias and Ira Ehrenpreis, tech mogul Larry Ellison, former media executive James Murdoch and his brother Kimbal Musk, are investing tens of millions of dollars in each other's companies.
Specifically, Ellison holds billions of dollars in Tesla shares with a holding ratio of about 1.5% in 2022. Some people also receive financial support and help from billionaire Elon Musk.
Tesla Board Member Ira Ehrenpreis (Photo: Business Insider).
Tesla pays its directors largely in stock options, and the current board has earned more than $650 million in total from selling those options.
They held nearly $1 billion in additional options. Several directors agreed to return some of that money to Tesla to settle a shareholder lawsuit over their compensation, while denying any wrongdoing.
Most of Tesla’s eight current board members have accumulated hundreds of millions of dollars worth of stock over the years, more than any other company.
Antonio Gracias, another former independent director at Tesla and a good friend of Musk's, and his venture capital firm recently held about $1.5 billion worth of investments in Musk's companies.
Many other directors of Elon Musk's companies have personal and financial ties to the billionaire. They have also profited enormously from their relationship with the billionaire.
According to the WSJ , these connections also raise questions among some shareholders about the independence and conflicts of interest of board members responsible for overseeing the CEO.
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