Some Tesla Inc. board members felt pressured to take drugs with Chief Executive Elon Musk for risk of upsetting him if they did not partake, the Wall Street Journal reported Sunday.
In a report following up on a January article that detailed Musk’s alleged use of illegal drugs and executives’ and board members’ concerns for the health of Musk and his companies, the Journal on Sunday detailed the deep personal and financial ties that bind Tesla directors to the company and to Musk, including parties, vacations and large investments in each others’ companies.
According to the Journal, most of Tesla’s directors have earned stock options worth hundreds of millions of dollars during their terms, significantly more than board members at other companies. The report cited experts in corporate governance who said such close ties could interfere with directors’ independence.
The report also said some current and former board members at Tesla
and SpaceX have direct knowledge of Musk’s drug use, but have not moved to address it.
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According to the Journal, the volume of Musk’s and some board members’ drug use — which reportedly has included cocaine, ecstasy, LSD, magic mushrooms and prescription ketamine — has become concerning.
Some of Musk’s friends and company directors feel an expectation to use drugs at parties he attends, the Journal said, feeling pressure not to refuse since he’s made them so much money and out of a desire to remain in his good graces.
The Journal also reported that in 2022, Oracle Corp. co-founder Larry Ellison — a friend of Musk’s and a former Tesla board member — offered use of his Hawaiian island for Musk to relax and detox from his drug use. Around the same time, other friends reportedly urged Musk to go to rehab.
Still, board members have taken no public actions to rein in Musk’s apparent drug use.
The lack of board pushback to Musk was brought to the forefront last week when a Delaware chancery judge voided Musk’s $56 billion compensation package, ruling that the board did not act independently, and that Musk “enjoyed thick ties with the directors tasked with negotiating on behalf of Tesla.”
Potential drug use by Musk and board members raises a number of red flags that could affect the companies, including erratic behavior, possible violations of the law and exposure to blackmail. It could also violate billions of dollars’ worth of U.S. government contracts with SpaceX and affect security clearances.
NASA said last month it has no evidence of drug use at SpaceX, according to Bloomberg News, and Musk’s lawyer told the Journal in January that the CEO has never failed a drug test.
Tesla, which disbanded its media relations department in 2020, did not respond for a request for comment Sunday. SpaceX also did not respond to a request for comment.