Elon Musk Just Proved Why CEOs Should Not Have Absolute Power

Elon Musk is nearly always newsworthy, but even for him, the past week has been headline-filled. First, the world learned on Wednesday that last November–weeks before the birth of Musk’s second child with the musician Grimes–he secretly fathered twins with Shivon Zilis, a rising star in the world of artificial intelligence and director of operations and special projects at Musk’s company Neuralink. The births came to light after Insider discovered court documents granting Zilis and Musk’s request that the babies’ names be changed, adding their father’s last name and having their mother’s last name become part of their middle names.

Then on Friday, in a regulatory filing, Musk sought to officially back out of his $44 billion purchase of Twitter, claiming that the company had failed to provide requested information on the prevalence of bots (tweeting algorithms) on the platform–or at least not in a sufficiently useful format. This wasn’t exactly surprising. Musk seems to have been trying to squirm out of this purchase almost from the moment his offer was accepted–which very likely came as a surprise to him. It’s not entirely clear how the whole Twitter saga will work out for Musk, though, since he made a firm offer in writing to buy the company and that offer was not contingent on how many bots were or weren’t on the platform. In fact, he waived his right to due diligence to get the deal done quickly.

Twitter has responded with a tweet saying the company plans to sue Musk to ensure that the deal goes through. The value of both Twitter shares and shares of Tesla, which Musk is using to finance the deal, have both gone down quite a bit since Musk first moved to buy Twitter, so some observers speculate that all this posturing is just a prelude to a renegotiation of the purchase at a lower price. If Musk really does bow out, it seems likely he’d be on the hook for at least $1 billion in charges, and potentially a lot more.

If indeed Musk fails to purchase Twitter and suffers financial consequences as a result, it won’t be the first time something like this has happened to him. He famously tweeted in 2018 that he had “funding secured” to take Tesla private when that turned out to be untrue. He and Tesla each wound up paying a $20 million fine as a result, and Musk was forced to give up his role as chairman of the company for three years, although he retained his position as CEO.

So the Twitter brouhaha may be business as usual for Musk, but news of the the secret twins is something else again. The timing of this revelation makes it seem like part of a very bad pattern. About six weeks ago, a judge ruled that a lawsuit alleging widespread sexual harassment at Tesla can go forward, despite the company’s attempt to shut it down by citing an arbitration clause. And just a few days before that, Insider reported that SpaceX had paid $250,000 for a flight attendant’s silence about Musk’s inappropriate behavior and sexual advances during a flight on a company jet. (Musk has denied the harassment allegations but not commented on the payment.)

In light of these other accusations, Musk’s liaison with Zilis, along with the secrecy surrounding it, looks a lot like one more instance of a spoiled, out-of-control billionaire seeking sexual congress with whatever youthful female happens to be in reach, and allowing or even promoting an atmosphere of sexual harassment throughout his workplace. That’s a very big shame because data science in general and artificial intelligence in particular are fields completely dominated by white men. Four years ago, AI expert Rana el Kaliouby reported attending the premiere of a new AI documentary where she and Zilis were the only two female AI experts. “AI is in dire need of diversity,” Kaliouby wrote. Until this week, Zilis represented a bit of that needed diversity. She was listed in both Forbes‘s “30 Under 30” and LinkedIn’s “35 Under 35” for her achievements. Unfortunately, from now on she’ll be most famous as the mother of Musk’s secret twins.

Does Musk have too much power?

These events make clear that there are weaknesses, as well as strengths, when an organization has a single, all-powerful leader. Musk, who has tweeted about his bowel movements, famously has no filter. This is part of his appeal and the reason he has more than 100 million Twitter followers–and it’s why his public persona and social media are the only marketing strategy Tesla has ever needed. At the same time, his public persona and social media can be a real liability. Musk’s most recent tweets seem designed to encourage engineers and other employees to avoid his companies, for instance by warning them that they’d be expected to work “at least” 40 hours a week in the office at Tesla or that work ethic expectations if he buys Twitter “would be extreme.” 

However male employees or prospective employees might feel about working at a company Musk owns, I have to believe the events of the past few weeks would cause female engineers to question the wisdom of working in places where they reportedly would have to put up with lewd comments, inappropriate touching, and sexual propositions as part of their workplace landscape. It’s hard to see how people believing that could be beneficial to any of Musk’s companies.

As others have noted, if Musk were a hired CEO instead of a larger-than-life founder, he’d have been fired by now. If you don’t believe that, consider McDonald’s former CEO Steve Easterbrook, who not only lost his job but was also forced to return $105 million in equity and other compensation after his relationships with McDonald’s employees came to light. Because Musk’s companies are so bound up with his persona, he’s probably safe forever from any such consequences. Which may mean that Tesla, SpaceX, Neuralink and all the rest will always rise on the ups and downs of his whims, and his tweets.