Musk’s $trillion pay package is impossible to justify
The Notebook, where the City’s movers and shakers have their say. Today it’s investment analyst Susannah Streeter with the pen
Radio phone-ins, social media feeds and TV news programmes have all been taken over by talk of Elon Musk’s trillion-dollar deal. I was woken super early by one producer and the phone barely stopped ringing, such was the demand to fill column inches and airtime, with debate about the extremes of capitalism. Make no mistake, this is a performance-related pay package on steroids. Norway’s sovereign wealth fund called it out early, voting against the proposal given its super-excessive nature. But Tesla’s army of retail investors has been swayed by the big tech bro’s wishful thinking, desperate for his dreams of turning Tesla into a robotics and AI global front runner to become reality.
In many ways, you can’t blame the board for taking a punt on Musk. It’s all an act of speculation. If he really can grow Tesla into an $8.5 trillion business, they think it’s well worth the reward. Of course this is all pie-in-the sky, especially given so many of his Tesla projects – from the Roadster and Cybertruck to self-drive tech have been beset with so much delay and disappointment.
Any way you look at it though, the optics are just so wrong, at a time when millions can’t even afford public transport. It’s little wonder calls for a super tax on billionaires have grown louder in countries around the world. In New York, incoming mayor Mamdani swept to power on an affordability agenda, pledging to impose taxes on big corporates and the super-wealthy. We’ve already seen the repercussions of Musk cosying up to Trump, in plummeting vehicle sales and attacks on showrooms. The prospect of Tesla’s Optimus humanoid robots lining a trillionaire’s pockets while eliminating jobs, and becoming the target of societal rage, is an outcome its blinkered board just don’t want to see.
Budget games
It’s been a taxing week for anyone contemplating their personal finances, with the prospect of dwindling take-home pay looming into focus in the UK, especially given Rachel Reeves’ latest speech to the nation. There’s been an ongoing game among headline writers to land a suitable nickname for the UK’s first female chancellor – and ‘Rachel from Accounts’ or ‘Queen of Thieves’ are the unsavoury monikers that seem to have stuck. Critics are many but few would envy her incredibly difficult task of trying to balance the books, to keep bond markets onside and prevent department budgets being eaten away by sky-high interest payments on government debt. Filming for a TV piece on borrowing costs last week, the game we played was Jenga, to illustrate just how difficult it is going to be to pull chunks more revenue out of the economy while trying to stop it from tumbling into recession. The shaky economic Jenga tower needs the glue of growth, and that can only come from incentivising businesses to invest more in technology and talent. We need to resist retreating to the austerity moves mirroring the post credit crunch period, which are arguably at the root of our current malaise.
Remarksable progress
Back in 2008, just as the financial crisis took hold, there were brave faces down in Bristol where I was at the launch of a new, multi-million-pound city centre retail development. At a time of a credit crunch and the beginnings of that austerity era, hopes were high that it could still be a beacon of shopper delight. Fast forward 17 years and the cornerstone House of Fraser store is no more but the Cabot Circus centre is still going strong. So much so that Marks and Spencer is hoping it’ll succeed at the lynchpin site where House of Fraser struggled. The new 80,000 square foot store over three floors will include a mega market-style foodhall and a 200-seater cafe. We may be facing fresh worries about another financial market meltdown and consumers are bracing for another round of tax rises, but M&S is quietly confident. It emerged from its cyber crisis in resilient fashion. Despite huge disruption of its services, it saw food sales grow by 7.8 per cent over the period. A ‘remarksable’ performance which certainly bodes well for the success of this store.
Trusted slogans
M&S has had its fair share of slogans which sunk deep into the consumer psyche. Timing the move to a new phrase to capture the public’s imagination is never easy. I had a fascinating chat with the outgoing CEO of McDonalds UK, Alistair Macrow at the Institute for Practitioners in Advertising conference, in the delightful Shoreditch town hall, a few weeks ago. The talk was awash with the advent of AI, the use of big data to tap into trends, and the influence of today’s influencers, but Alistair gave a super useful reminder – newness is not everything. Sticking with tried, trusted and beloved slogans and campaigns, and resisting the constant itch to reimagine marketing, can often be a much braver and more effective choice.
Christmas ads
But there’s one annual reinvention which can still be counted on to capture the imagination; the Christmas TV ad. John Lewis has smashed it out of the park again, with a dad and son raver moment. It really is a perfect demonstration of how music can move more than words. It didn’t take long for the festival marketers to spin into action. My Facebook feed was flooded with ads for next year’s Shindig ‘weekender’ trying to tempt me back to the 2026 event with an early-bird ticket offer for me and my teenagers. Dancing the night away in the techno tent with my 18-year-old and his friends was worth dragging our kit across rivers of mud. Now, if Elon Musk can build a robot that can carry my backpack, pitch a tent and survive three days in a muddy festival site, maybe he will earn that $trillion.
Quote of the week
‘And you thought the Clash were angry’
Beth Thornton from Riot Women