(bt - Business Today) - Elon Musk, the second richest man in the world and CEO of Tesla, SpaceX, Twitter, and other ventures, has opened up about his thoughts on succession planning and the involvement of his children in his companies. In a recent statement, Musk shared his concerns and outlined his ideas for the future of his businesses.
During an interaction with WSJ, Musk discussed his succession plans and the future of his companies. The billionaire revealed his reservations about handing over control to his children. Succession planning has long been a challenging issue for Musk. During the introduction, he said, "succession is one of the toughest age-old problems."
Contrary to the common practice of inheritance, Musk expressed his belief that giving shares to his children, regardless of their interest or capability to manage the companies, would be a mistake.
"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. I think that's a mistake."
Instead, Musk proposed the idea of creating an educational institution that would hold control of his voting shares. By doing so, he aims to address the complex issue of succession and ensure that capable individuals are appointed to executive roles in case of unexpected events. Furthermore, Musk confirmed that he has already identified potential successors and shared his recommendations with the boards of his companies.
"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."
Musk's focus on meritocracy could also lead to the idea of his children not inheriting his wealth. Despite having nine children, including his 3-year-old son X AE A-XII, whom he often showcases at events, Musk believes that inheritance should be based on interest, inclination, and ability rather than family ties.
The billionaire entrepreneur has been actively involved in multiple ventures, serving as Tesla's CEO and Twitter's chief technology officer. He recently appointed a new CEO for Twitter which will enable him to focus his attention back on Tesla.
Musk further expressed enthusiasm regarding India, affirming that the country is indeed 'interesting'. This aligns with the automaker's intention to establish a manufacturing base in the country, as confirmed by IT Minister Rajeev Chandrasekhar.
Tesla has been expanding its global output, with earlier announcements about opening a Gigafactory in Mexico. Additionally, Musk hinted at selecting a new factory location by the end of the year.
By Danny D'Cruze | New Delhi
May 24, 2023
