DealBook Briefing: Elon Musk’s All-or-Nothing Bet on Tesla

Good Tuesday morning from a really snowy Davos. We just broke news of Elon Musks’s ambitious new compensation plan at Tesla and interviewed Dara Khosrowshahi of Uber here at the World Economic Forum. We also broke Paddle8’s newest deal. And a British regulator just issued a preliminary rejection of Fox’s bid for Sky.

He’ll earn billions of dollars for leading Tesla over the next decade — or nothing.

That’s under a new compensation plan that Andrew reported first today. Critics, and there are many, may regard it as yet another publicity stunt by the electric car marker, which has struggled to meet production targets for its Model 3.

But Mr. Musk and the head of the Tesla board’s compensation committee said the arrangement would benefit shareholders, since it’s directly linked to company performance.

Here’s what Mr. Musk told Andrew:

Trivia: California law requires that Tesla pay Mr. Musk minimum wage, even though he doesn’t want a salary. So it cuts him a check for a little over $37,000 each year, which he never cashes.


Today’s DealBook Briefing was written by Andrew Ross Sorkin in Davos, and Michael J. de la Merced and Amie Tsang in London.


Here’s what movers and shakers are saying in the Swiss Alps:

Dara Khosrowshahi on Uber’s very bad year:

Marc Benioff of Salesforce on why trust has to be a company’s highest value (something he says isn’t always true in Silicon Valley):

Michael Corbat of Citigroup on the “numbness” that has descended upon the global economy:

John Studzinski, a Blackstone vice chairman, on the focus on the world’s wealthiest:

More from the World Economic Forum

• Did Emmanuel Macron persuade President Trump to attend? (Axios)

• PWC’s latest survey of C.E.O.s survey shows record confidence — but also worries about terrorism, climate change and global politics. (CNBC)

• Edelman’s newest trust barometer shows suspicion of public institutions rising fast among Americans — and the opposite in China. (Edelman)

A year ago, the online art auctioneer found itself suddenly on its own, after its merger partner of just under a year filed for bankruptcy. Now the company, best known for selling a Wu Tang Clan album to Martin Shkreli, has struck a new deal.

Paddle8 is selling a 15 percent stake to The Native, a Swiss tech and ecommerce company, Michael is the first to report. That partnership will help it incorporate blockchain into its services as it seeks to expand into the wider luxury market. (And The Native has the option to buy a majority stake.)

“This is a way for us to show we can better align with a new generation of collectors,” Alexander Gilkes, a founder of Paddle8, told Michael.

The virtual currency flyaround

• UBS’s chairman, Axel Weber, warned that Bitcoin is speculative and is not advising clients to invest in it. (CNBC)

• South Korea will ban the use of anonymous bank accounts in virtual currency trading, hoping to clamp down on crimes like money laundering. (Reuters)

• The I.R.S. has similar concerns. (NYT)

• Investors are desperate to buy into Coinbase, but shareholders aren’t allowed to sell. (Recode)

• Alphaville parsed recent comments by the S.E.C.’s chief, Jay Clayton, about initial coin offerings. (FT)

• Adding “blockchain” to your company’s name still pays off. (Bloomberg)

Congress reopened the government after a three-day impasse. But the fate of the young immigrants known as Dreamers remains unclear. Moderate lawmakers prevailed after a bipartisan meeting that involved a Native American talking stick. Many liberal activists are unhappy.

President Trump’s reaction:

In the compromise: $31 billion in tax cuts, including a temporary delay for three health care taxes.

The policy flyaround

• Read a draft of the White House’s infrastructure plan, including the lack of a higher gas tax. (Axios)

• The F.B.I. director, Christopher Wray, threatened to resign if Attorney General Jeff Sessions removed his deputy Andrew McCabe, according to unnamed sources. (Axios)

• The White House’s message for 2018: It’s all about the economy. (WaPo)

• The Trump administration’s energy agenda faces a tougher year. (Politico)

• Montana became the first state to roll out net neutrality rules after the F.C.C.’s were repealed. (Axios)

The big tariffs the White House imposed yesterday on imported washing machines and solar energy components appear aimed at countries like China and South Korea. They may respond in kind, as well as by appealing to the W.T.O.

Meanwhile, shares in affected companies appeared little changed. “Investors are not too worried about the news, because these sectors have already discounted possible tariff moves by Trump,” Linus Yip, the chief strategist at First Shanghai Securities, told Bloomberg.

Mike Bloomberg, however, wasn’t happy.

Britain’s Competition and Markets Authority said in a provisional ruling that 21st Century Fox’s offer was “not in the public interest.” So where does that leave Rupert Murdoch’s quest for control?

Fox said that it still expects to win over the regulator before its final ruling in June.

Sky is looking on the bright side, saying the authority suggested potential remedies. (Those included selling Sky News or protecting it from Murdochian influence.)

In other Murdoch news: Mr. Murdoch argued that Facebook and Google should pay trusted publishers a fee similar to the carriage payments that cable companies pay to channel operators. (Sky has long enjoyed some exceptions.)

The media and tech flyaround

• Another stellar earnings report from Netflix lifted its stock price, at least in after-hours trading. (FT)

• Kevin Roose’s modest proposal for fixing Facebook: Make it more like Instagram. (NYT)

• How Facebook reckoned with election fallout f and, overall, a not-so-great year. (WaPo)

• Big tech companies set a record for spending on lobbying last year. (Axios)

• Scott Galloway, a widely followed N.Y.U. professor of marketing, argues that the big four tech companies should be broken up. (Axios)

• Bacardi will buy the 75 percent of Patron that it doesn’t already own, valuing the tequila maker at $5.1 billion. (Bloomberg)

• The governor of Puerto Rico said it would sell its highly indebted power company. (WSJ)

• Elliott Management and Bluescape are part of a consortium that has invested $2.5 billion in FirstEnergy, and could end up owning at least 16 percent of the troubled utility company. (WSJ)

• A.I.G. agreed to buy Validus Holdings for $5.56 billion, signaling a return to expansion. (A.I.G.)

• Dalian Wanda has hired Citigroup, CLSA and UBS to underwrite the I.P.O. of its sports business, according to unnamed sources. (Reuters)

Shareholder activism corner

• Dan Loeb’s Third Point has pressed Nestlé to consider selling more brands — and keeping its L’Oréal stake. (NYT)

• Alexion Pharmaceuticals said it had added Deborah Dunsire, a medical doctor and former C.E.O. of Millennium Pharmaceuticals, to its board, with the consent of Elliott. (Alexion)

• Cerberus Capital Management’s founder, Stephen Feinberg, is the White House’s top pick to lead Mr. Trump’s Intelligence Advisory Board, according to unnamed sources. (Foreign Policy)

• K.K.R. is opening a new office in Frankfurt, to be led by Christian Ollig, who worked on the proposed acquisition of Unilever’s spread business. (K.K.R.)

• Six weeks after firing Harold E. Ford Jr. for misconduct, Morgan Stanley clarified that the misbehavior was not sexual. (NYT)

• Bill Ackman is cutting almost a fifth of staff at Pershing Square and seeking less of a public profile after three years of losses, according to people familiar with the move. (Reuters)

• China is considering adopting a property tax that could reshape and perhaps even destabilize its economy. (NYT)

• Ando, a meal-delivery enterprise started by the chef David Chang, will be absorbed by Uber Eats. (NYT)

• The buyout industry is on a tear, but there are alarming signs that the boom could turn to bust. Buyout firms went out of business after a period of similar frenzied activity a decade ago. (FT)

• The level of capital being injected into start-ups in China has raised concerns that it is the quantity of money available, rather than the quality of the investments, that will determine the outcomes. (FT)

• The owner of an oil refinery rescued from the brink of closure by Carlyle in 2012 has filed for bankruptcy protection to restructure its debts. (FT)

• Some of what’s at stake in Nafta negotiations: bacon, jeans and beer. (NYT)

• To effectively combat misuse of shell companies, the U.S. would need a detailed registry of their owners. The cost of that might be the greatest impediment to real change in how assets can be hidden, writes the White Collar Watch columnist. (NYT)

• Five former employees of KPMG and a former government accountant have been charged by federal prosecutors with plotting to help the firm get a leg up in a regulatory review of its auditing. (NYT)

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