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Friday, Jul 26, 2024

Elon Musk says he doesn't plan to give his kids control of his companies

Elon Musk says he doesn't plan to give his kids control of his companies

Elon Musk is bucking a billionaire trend. He says he doesn't plan to hand over his companies, which include Tesla, Twitter, and SpaceX, to his kids.
Elon Musk says he doesn't plan to hand over his companies to his kids any time soon.

The billionaire said during an interview at The Wall Street Journal's CEO Council that he's identified people who could take over his companies if he became indisposed. But, he said he thinks that it's wrong for executives to hand over their companies or voting shares to their children.

"I am definitely not of the school of automatically giving my kids some share of the companies, even if they have no interest or inclination or ability to manage the company," Musk said. "I think that's a mistake."

The Tesla CEO did not respond to a request for comment from Insider ahead of publication.

Musk has nine known children, the oldest of which is 19 years old. The billionaire is often seen touting his 3-year-old son, X AE A-XII, to events and even gave his son his own Twitter badge. Baby X's mother, Grimes, has said Musk sees him as a "protégé."

But, Musk is not close with all of his children. Last year, his oldest child applied to have her name changed, telling Reuters she no longer wished to be "related to my biological father in any way, shape or form."

The question of whether to bring children into their empire is a longtime debate amongst billionaires. Some entrepreneurs like Apple's Steve Jobs didn't plan to pass their fortune onto their kids.

Though many billionaires, of course, choose to bring their family into the fold. Some of the richest men in the world — from Bernard Arnault to Rupert Murdoch — have handed over pieces of their empire to their children and launched Succession-style battles within their families.

Musk, who owns five companies, said "succession is one of the toughest age-old problems," but said he's told board members at his companies which people he would like to succeed him in his executive roles. Musk serves as Tesla's CEO, as well as chief technology officer at Twitter.

"There are particular individuals identified that I've told the board look, 'If something happens to me unexpectedly, this is my recommendation for taking over,'" Musk said. "So in all cases, the board is aware of who my recommendation."

The billionaire said he's much more concerned about who would take over the shares he owns in his companies — an issue Musk said he's been "wrestling with." His initial idea is to create a "sort of educational institution" that would control his voting shares.

Earlier this month, Musk dispelled rumors that he was looking for a new CEO to replace him as Tesla CEO at the company's annual meeting. Musk's comments came after The Wall Street Journal had reported Tesla's CFO Zach Kirkhorn could be Musk's successor.

Last year, Tesla board member James Murdoch — one of Rupert's sons — said during a trial for a lawsuit against Musk and Tesla that the billionaire had identified a potential new CEO for Tesla, but did not comment on who the individual could be. Earlier this year, several news outlets speculated that the carmaker's chief in China, Tom Zhu, could be Musk's successor after he took over leadership of Tesla's US assembly plants and sales in both North America and Europe in January, according to a report from Reuters.

Musk's succession plan for his companies, particularly Tesla, has entered the spotlight since he took Twitter private in October. Musk's preoccupation with Twitter spurred concerns from several investors that worried he'd grown distracted. Most recently, several Tesla investors sent an open letter to company board members calling for the billionaire to be reined in.

Still, concerns over Musk's succession plan appear to have died down in the weeks since he selected a new CEO to run Twitter. At the time, Wedbush tech analyst Dan Ives said in a note that Musk would finally have time to focus on his "golden child" companies.
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