If you thought Tesla and Elon Musk escaped the clutches of the Securities and Exchange Commission with a fairly modest punishment, settling civil fraud charges for a mere $20 million each, think again. A clause requiring Tesla's board to establish a committee to supervise Musk's communications might be the biggest threat the company has faced.
For years, Musk has had free rein to hype Tesla's technology, spin media coverage and burnish his image as a quirky yet heroic visionary. Considering Tesla's persistent operational and financial challenges, yet heady market valuation, Musk's promotional efforts may at least be as important to Tesla as his day-to-day management.
It's not clear how much self-control Musk is even capable of. Since the SEC filed charges against him, he has rejected its first settlement offer, released a statement referring to Tesla as "the most successful US auto company in over a century," written an email claiming Tesla is "close to achieving profitability" and sent a roguish tweet suggesting that he is "naughty by nature."
With Tesla's stock price recovering and fans on Twitter celebrating his wry defiance, the feedback loops that encourage the brashness that got Musk into trouble with the SEC are proving resilient. For all of Musk's accomplishments, his ultimate challenge might be simply resisting the urge to put on a show.