Elon Musk’s reported drug use has Tesla Inc. board members facing a familiar quandary: having to decide what, if anything, to do about the chief executive subjecting directors and shareholders alike to great financial and legal risk.
The Wall Street Journal’s article describing Musk’s history of recreational drug use and ongoing consumption of ketamine is the latest in a long line of tests for a board packed with the CEO’s acolytes — several of whom agreed less than six months ago to return $735 million to settle a lawsuit alleging they had excessively compensated themselves.
Shareholders voiced dissatisfaction with the board last year over Tesla’s succession planning, and accused Musk of being distracted by his commitments to other companies. His chaotic 2022 takeover of Twitter Inc., the social media company he’s renamed X Corp., contributed to Tesla losing $672 billion in market capitalization that year.
Before that, directors rode out litigation related to Musk’s doomed effort to take Tesla private in 2018, and his calling a cave explorer involved in the rescue of a youth soccer team in Thailand that year a pedophile. They also testified in proceedings related to the $55 billion compensation package they arranged for Musk in 2018, and in a trial challenging Tesla’s $2.6 billion acquisition of SolarCity, the struggling power provider run by Musk’s cousins.
The report by the Journal — which said Musk has used LSD, cocaine, ecstasy and psychedelic mushrooms, often at private parties — isn’t even the Tesla board’s first brush with drug-related issues. Weeks after the New York Times reported in August 2018 that directors had expressed concern about Musk’s use of Ambien, he puffed a blunt containing marijuana on comedian Joe Rogan’s podcast.