Charles Morris points out in his article that unlike GM and Ford whose CEOs only own miniscule fractions of the companies, Tesla CEO Elon Musk owns 21% of the firm. Morris also points out that Musk won’t receive any compensation until Tesla’s market cap exceeds $100 billion, and will receive the entire package only if Tesla’s valuation reaches $650 billion.

In January 2019, Tesla became the first $100 billion publicly listed U.S. carmaker and in January of 2021, Tesla’s market cap surpassed $800 billion. Not only is Elon Musk’s financial wealth on the line, but his entire reputation and life’s work is tied up in the success or failure of Tesla. It is no surprise then that the valuation targets have been met and this case may be one of the clearest representations of the principle-agency issue.