by Elon Musk, the CEO of Tesla Inc. And SpaceXis strongly opposed to the concept of passing wealth on to unworthy children.
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“I'm definitely not the type to automatically give my kids shares in the companies even if they have no interest, inclination or ability to run the company,” he said. “I think that's a mistake.”
According to Musk, executives should refrain from transferring their shares to descendants who lack the interest or ability to effectively run the companies.
Instead, Musk advocates a meritocratic approach, suggesting that it's wiser to hand leadership to deserving individuals within the organization rather than simply giving shares to heirs who may lack genuine passion for the company. Musk's position of empowering capable individuals, rather than just relying on inheritance, is proving to be a sensible approach.
During an interview with The Wall Street Journal's CEO Council, the billionaire CEO revealed that he has already identified competent successors who could take over his companies if the need arises. He strictly opposes managers passing on their business or voting rights to their children without considering their qualifications. Musk believes in meritocracy and argues that leadership positions should be earned on the basis of individual competency, not just family ties or inheritance.
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Musk has different relationships with each of his ten children. While he often includes his three-year-old son, X AE A-XII, in public events and even gave him a special Twitter badge, not all of his children share the same level of closeness with him. His eldest daughter recently expressed a desire to change her name, implying that she wants to create some distance between her and her father and the public image that goes with it. The complex dynamics within Musk's family underscore the uniqueness and individual connections that exist between parent and child.
The question of whether billionaires should include their children in their business empires has long been debated. While some like apple inc Co-founder Steve Jobs chose not to pass his wealth on to descendants, others have welcomed family members into their businesses, leading to family power struggles reminiscent of the TV show Succession.
As the owner of five companies, including Tesla and Twitter Inc.Musk acknowledges the challenge of succession planning and describes it as an ongoing issue. He has communicated to the boards of his companies his preferences regarding possible successors to his senior positions in the event of unforeseen circumstances.
Musk also expressed concerns about the succession of his shares in his companies and struggled with possible solutions. One idea he has considered is the creation of an “educational entity” that would control his voting shares.
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Recent rumors suggested that Musk was looking for a new CEO for Tesla, but he dispelled those speculations during Tesla's annual meeting. While potential successors to Tesla have previously been named, such as CFO Zach Kirkhorn or the automaker's China boss Tom Zhu, Musk has not revealed any specific details about the people he has his eye on.
The succession plan for Musk's companies, particularly Tesla, has attracted attention since he decided to take Twitter private. Concerns have been raised about Musk's focus and commitment, prompting some Tesla investors to call for more oversight. With the recent appointment of a new CEO for Twitter, analysts are predicting that Musk will now have an opportunity to focus on his other ventures, often referred to as his “golden child” businesses.
Invest in startups
Musk owns hundreds of millions of billions of dollars worth of Tesla stock. The billionaire also owns significant stakes in a number of other companies including SpaceX, The Boring Company and Neuralink. This is because he either founded the company or invested in the company in the early stages as a startup. Thanks to changes in federal law, anyone can invest like Elon Musk and own shares in high-growth startups. Platforms like StartEngine and Wefund allow anyone to invest in top startups, including a stake in StartEngine itself.
For more information, see startup investments by Benzinga.
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This article, “Elon Musk's 10 Children Won't Automatically Inherit Shares in His Businesses — He Said It Was a Mistake” originally appeared at Benzinga.com
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