There was a time when Elon Musk’s live-streamed puff of marijuana would have only enhanced the image of an iconoclastic business magnate who cannot be bothered by social conventions in his quest to change the world.
But an ill-advised tweet in August by the SA-born Tesla CEO, who matriculated from Pretoria Boys’ High, led to serious questions about his stability and self-medication, changing the narrative in ways he seems not to have grasped.
“It’s particularly troubling given the issues that he has had already,” said Kabrina Chang, an associate professor at the Boston University Questrom School of Business in the US, who studies corporate ethics and labour laws.
“If I were a board member or investor, this would not give me a ton of confidence that he’s moving in that direction. It does not seem like forward progress in terms of governance and professionalism of Tesla.”
Musk, 47, sipped whiskey during a two-and-a-half-hour podcast with comedian Joe Rogan late on Thursday that touched on topics from flame throwers and artificial intelligence to the end of the universe.
While he said he was “not a regular smoker of weed”, he took a drag from what Rogan described as a blunt containing tobacco mixed with marijuana, which is legal in California.
“You want some of it? You probably can’t because stockholders, right?” Rogan asked. Musk replied “I mean, it’s legal, right?” and then took a drag.
Musk is under pressure to show competence. His spur-of-the-moment tweet in August that he planned to take electric car manufacturer Tesla private, only to drop the idea a little more than two weeks later, drew shareholder lawsuits and an investigation by regulators.
Just hours after Musk finished smoking marijuana in the interview streamed live online, it was confirmed that both his chief accounting officer and head of human resources were leaving Tesla.
The company’s shares fell 6.3% to $263.24, the lowest close since April 2, and have plunged about 30% since the day of his initial take-private tweets on August 7.
“The use of recreational drugs, legal or not, goes against the unspoken rules of being a public CEO,” Gene Munster, a managing partner at venture capital firm Loup Ventures and a longtime Tesla supporter, wrote on Friday. Musk’s actions were making it “harder to support Tesla as a company”, even as the fundamentals were improving, Munster said.
Even in the cannabis industry, smoking weed as a CEO or top executive in a nonrecreational setting was seen as unprofessional, Chris Walsh, founder and vice-president of the publication Marijuana Business Daily, said in an interview.
Tesla board members did not respond to requests for comment on Musk’s marijuana use.
In a blog post announcing a series of promotions late on Friday to fill several voids left by senior management departures, Musk made no reference to the episode, though he advised Tesla employees to ignore the news media and focus on Tesla’s growth.
“The issue here is not whether smoking pot is ethical or not,” said Tae Wan Kim, an associate professor of business ethics at the Tepper School of Business at Carnegie Mellon University. “It boils down to the basic assumption whether the CEO, as a trustee of Tesla’s stakeholders, has a duty to be aware of public reactions to his behaviours. As a free person, at least in California, Musk has the right to smoke pot wherever he wants. But with his CEO hat on, he should have seen that his reactions would provoke negative impact from Wall Street.”
The Tesla board needs to act quickly to get a handle on the situation, said Betsy Atkins, a director at companies including Volvo Cars and Wynn Resorts. Tesla’s board needs to consider hiring an executive to assist with day-to-day operations, she said.
“As a board member at Tesla, it’s got to be clear to you that your CEO is in distress,” Atkins said in an interview.
“It’s hard to see this behaviour as other than either deliberate acting out, or a call for help. Or an, ‘I don’t give a hoot.’ It’s one of those things,” Atkins said.