I love what Musk's companies are doing, but I would never actually want to work for any of them. They all heavily take advantage of passionate people by overworking and underpaying them, while Musk and the big shareholders alone trap the lion's share of the rewards. Musk is the world's richest person now, but he can't even help fund his employees' retirement?
Meanwhile I'm over here getting a 50% no-limit match on my contributions, which is pretty common in tech.
"no limit" seemed amazingly generous until I realized the total annual contribution limit is $19,500 (exceptions apply), so this benefit would be valued at about $9,750. Still very generous, but should be factored with other benefits when evaluating total compensation.
This is what is so disgusting in a way. People adore and worship a man for his wealth but not how he got there. Not paying your employees a fair share or securing their safety just because it's legal doesn't make you a great man.
>"while Musk and the big shareholders alone trap the lion's share of the rewards"
I get you but I think Musk doesn't accumulate wealth in the way you are thinking here. And that in general he at least works the same shitty hours and conditions he expects others to work. A relevant interview:
Döpfner: Are you looking for places?
Musk: No, I'm not really buying any places. I stay at a hotel sometimes.
Döpfner: Where are you sleeping tonight?
Musk: I'm just going to be sleeping at the factory in one of the conference rooms.
Döpfner: You'll be sleeping in a conference room in the factory?
Musk: Yeah.
Döpfner: Alone?
Musk: That's my understanding, yeah. You've got to get a feel for the situation.
Döpfner: You said, in a recent quote, that possession just weighs you down. And that's why you want to get rid of your possessions. And that's why you have literally started to sell property. You have sold belongings. Is it more a metaphor or are you literally selling your belongings?
Musk: I sold my primary home.
Döpfner: The one in LA?
Musk: It was done two months ago. It was actually bought by a guy in China. And then I sold the house I own across the road, which used to be owned by Gene Wilder. It's very much his personality, and I sold it below market to his nephew who grew up there. And then we're in the process of selling my other houses. I guess I'll rent a place somewhere.
Döpfner: So why are you doing it? Because it's too much of an obligation, or it's limiting your freedom? You are considered to be the second-wealthiest person in the world. And now you are getting rid of your property.
Musk: In fact, I'll have basically almost no possessions with a monetary value, apart from the stock in the companies. So, if things are intense at work, I like just sleeping in the factory or the office. And I obviously need a place if my kids are there. So, I'll just rent a place or something. And a lot of the time it's just me, so I don't really need a big place.
Döpfner: So, no art collection, no cars, no real-estate property, no other stuff that we usually associate with wealthy people. Do you believe that getting rid of all that makes you a free man?
Musk: Yes, essentially, I think that also. Like the reason that I am accumulating wealth, if you will, which is really just stock in Tesla and SpaceX. The only publicly traded stock I own is Tesla. That's it. If Tesla and SpaceX go bankrupt, I will go bankrupt personally. One-hundred percent. But I also think, why should I try to have stock anyway. Why do I have all this stuff? Going back to what I was saying earlier, I think it is important for humanity to become a spacefaring civilization and a multiplanet species. And it's going to take a lot of resources to build a city on Mars. I want to be able to contribute as much as possible to the city on Mars. That means just a lot of capital.
Döpfner: And you want to focus on that?
Musk: Yes, and I'm also just trying to make clear that I'm serious about this. And it's not about personal consumption. Because people will attack me and say, oh, he's got all these possessions. He's got all these houses. OK, now I don't have them anymore.
I assume that "50% no limit match" is for 401K contributions? In which case, I guess it still has an IRS backstop of $9750 if you max out your 401k contributions?
Musk has stock options that he has to buy and he doesn't get a salary. He said he doesnt own houses or yachts and he works all the time. He's spending it on making humans interplanetary. Of all the billionaires to bitch about, Musk is clearly many standard deviations more industrious and capable than any of us, surely if there is financial allocation it should go to those who merit it the most? Would you prefer to have our lives set up in any other way?
Tesla is one of the stingiest wildly successful companies ever. They're still managing the day-to-day as though they're a scrappy startup that might miss payroll next month. I suppose they can get away with this as long as the stock keeps skyrocketing, but once that ends the low salaries, long hours, and poor benefits are going to come back to bite them badly.
Tesla is pretty cash constrained. They needed an equity raise to shore up their cash position just last year. It's trending better, but they've been cash flow negative or slightly positive.
Despite the offer of stock based compensation for employees, I still think this is a bad idea. The 401k is one of the most effective ways to encourage long-term savings among employees. Its an important benefit with significant tax advantages.
Can't you take your shares and deposit them in your 401K (pre-tax) and then sell them within it (not taxed) and exchange for a fund or w/e you're interested in diversifying with?
I get stock but I also get 401k matching too. The two are not the same at all and most good tech employers offer both.
Also, what does he think his personal compensation has to do with anything? This is about his employees' retirement plans, not about him. It's only about him insomuch as he's the one ultimately making the decision to be stingy.
This is kinda non-news. Stock price is up an incredible amount, so employees vesting stock have done extremely well. Were I in their position, I would also forgo 401k matching.
Yeah, I know, snarky. But that is of course the danger of having all your eggs in one basket. Anecdotally, you cite Tesla. Anecdotally I'll come back with Enron.
What is the state of 401k fees? Is it 1% AUM? The PBS doc "The Retirement Gamble" made 401ks look horrible.
===
Making some reasonable assumptions about a worker with 30 years to retirement, the 1980 version of the 401(k) tax deferral was equivalent to an additional investment return of 9.2% per year, an extraordinary incentive to save for retirement, even without an employer match. Using today’s numbers the benefit comes out to 0.6%, considerably less than the 1% to 2% in fees investors pay in typical 401(k) plans.
https://www.bloomberg.com/opinion/articles/2020-07-21/401-k-...
Many 401k plans have 0% fees and tiny fees on plan investments. I'm paying 0% fees on my 401k plan and absurdly low fees on the Vanguard Institutional Plus funds within it: .01-.04% per year depending on fund. (No that is not a typo.)
It all depends on the plan provider. The big ones like Vanguard, Fidelity, Schwab, etc., are all rock solid.
Its depressing the way a lot of contracts are written to fuck over employees. Look at your employment agreement. I bet your company is allowed to choose not to pay out 401K matches as well.
One of my friends who works there is getting ready to retire on the (non-401k) stock options he received (within the next year or two). He's only been out of college for 5 years.
"It's their money they can do what they want" is a bad argument. I can buy a sandwich in front of a homeless person begging for food and I can break it into pieces and feed it to the birds in front of him. It's my money I can do what I want. It doesn't change that fact it would be a disgusting thing to do to someone.
It's generally accepted that if you work with people and they contribute to your success you should recognise that and reward them rather than attempting to exploit their passion as far as possible. Elon Musk absolutely doesn't have to do that, but that doesn't mean people can't judge him for being an asshole.
[+] [-] CydeWeys|5 years ago|reply
Meanwhile I'm over here getting a 50% no-limit match on my contributions, which is pretty common in tech.
[+] [-] xnx|5 years ago|reply
[+] [-] sschueller|5 years ago|reply
[+] [-] dominotw|5 years ago|reply
my current company has no match.
previous had 4% match but i didn't get anything since i left before 4 yr match vesting.
previous previous had no match.
[+] [-] noch|5 years ago|reply
Tesla provides all its employees with stock options[0] and has had one of the best performing stock prices in the market.
Why on earth would I want a 401k when I can own Tesla stock at a discount? Musk is making all his employees wealthy.
[0]: https://electrek.co/2020/07/06/tesla-meteorite-rise-employee...
[+] [-] throwaway12893|5 years ago|reply
[+] [-] BellLabradors|5 years ago|reply
I get you but I think Musk doesn't accumulate wealth in the way you are thinking here. And that in general he at least works the same shitty hours and conditions he expects others to work. A relevant interview:
Döpfner: Are you looking for places?
Musk: No, I'm not really buying any places. I stay at a hotel sometimes.
Döpfner: Where are you sleeping tonight?
Musk: I'm just going to be sleeping at the factory in one of the conference rooms.
Döpfner: You'll be sleeping in a conference room in the factory?
Musk: Yeah.
Döpfner: Alone?
Musk: That's my understanding, yeah. You've got to get a feel for the situation.
Döpfner: You said, in a recent quote, that possession just weighs you down. And that's why you want to get rid of your possessions. And that's why you have literally started to sell property. You have sold belongings. Is it more a metaphor or are you literally selling your belongings?
Musk: I sold my primary home.
Döpfner: The one in LA?
Musk: It was done two months ago. It was actually bought by a guy in China. And then I sold the house I own across the road, which used to be owned by Gene Wilder. It's very much his personality, and I sold it below market to his nephew who grew up there. And then we're in the process of selling my other houses. I guess I'll rent a place somewhere.
Döpfner: So why are you doing it? Because it's too much of an obligation, or it's limiting your freedom? You are considered to be the second-wealthiest person in the world. And now you are getting rid of your property.
Musk: In fact, I'll have basically almost no possessions with a monetary value, apart from the stock in the companies. So, if things are intense at work, I like just sleeping in the factory or the office. And I obviously need a place if my kids are there. So, I'll just rent a place or something. And a lot of the time it's just me, so I don't really need a big place.
Döpfner: So, no art collection, no cars, no real-estate property, no other stuff that we usually associate with wealthy people. Do you believe that getting rid of all that makes you a free man?
Musk: Yes, essentially, I think that also. Like the reason that I am accumulating wealth, if you will, which is really just stock in Tesla and SpaceX. The only publicly traded stock I own is Tesla. That's it. If Tesla and SpaceX go bankrupt, I will go bankrupt personally. One-hundred percent. But I also think, why should I try to have stock anyway. Why do I have all this stuff? Going back to what I was saying earlier, I think it is important for humanity to become a spacefaring civilization and a multiplanet species. And it's going to take a lot of resources to build a city on Mars. I want to be able to contribute as much as possible to the city on Mars. That means just a lot of capital.
Döpfner: And you want to focus on that?
Musk: Yes, and I'm also just trying to make clear that I'm serious about this. And it's not about personal consumption. Because people will attack me and say, oh, he's got all these possessions. He's got all these houses. OK, now I don't have them anymore.
https://www.businessinsider.com/elon-musk-interview-axel-spr...
[+] [-] bonestamp2|5 years ago|reply
[+] [-] mam2|5 years ago|reply
[+] [-] andrewmcwatters|5 years ago|reply
Edit: I don’t know what warrants this a downvote; you’re insulated if you think no-limit matches are common.
[+] [-] yohannparis|5 years ago|reply
Rolex does a 300% matching, doesn't mean that all Swiss companies do the same.
[+] [-] zpeti|5 years ago|reply
Maybe they believe in the mission? Is anyone forcing them to work at Tesla? As far as I know Tesla doesn't use slave labour (not sure about China).
[+] [-] drcross|5 years ago|reply
[+] [-] woeirua|5 years ago|reply
[+] [-] 0x426577617265|5 years ago|reply
[+] [-] treis|5 years ago|reply
[+] [-] JKCalhoun|5 years ago|reply
[+] [-] dmos62|5 years ago|reply
[+] [-] _ea1k|5 years ago|reply
[+] [-] yohannparis|5 years ago|reply
[+] [-] nemo44x|5 years ago|reply
[+] [-] virgilp|5 years ago|reply
[+] [-] sschueller|5 years ago|reply
Even GM went bankrupt and whipped out its shareholders many of which where employees investing their money in the "safe" stock GM for retirement.
[+] [-] CydeWeys|5 years ago|reply
Also, what does he think his personal compensation has to do with anything? This is about his employees' retirement plans, not about him. It's only about him insomuch as he's the one ultimately making the decision to be stingy.
[+] [-] tyingq|5 years ago|reply
[+] [-] chairmanwow1|5 years ago|reply
[+] [-] JKCalhoun|5 years ago|reply
Yeah, I know, snarky. But that is of course the danger of having all your eggs in one basket. Anecdotally, you cite Tesla. Anecdotally I'll come back with Enron.
[+] [-] endori97|5 years ago|reply
===
Making some reasonable assumptions about a worker with 30 years to retirement, the 1980 version of the 401(k) tax deferral was equivalent to an additional investment return of 9.2% per year, an extraordinary incentive to save for retirement, even without an employer match. Using today’s numbers the benefit comes out to 0.6%, considerably less than the 1% to 2% in fees investors pay in typical 401(k) plans. https://www.bloomberg.com/opinion/articles/2020-07-21/401-k-...
[+] [-] CydeWeys|5 years ago|reply
It all depends on the plan provider. The big ones like Vanguard, Fidelity, Schwab, etc., are all rock solid.
[+] [-] falcolas|5 years ago|reply
[+] [-] AlwaysRock|5 years ago|reply
[+] [-] cphajduk|5 years ago|reply
[+] [-] usaar333|5 years ago|reply
Did Tesla ever match 401k contributions?
How rare is it for large companies to not do so?
[+] [-] doug-moen|5 years ago|reply
[+] [-] cccc4alll|5 years ago|reply
Most people want to work for Tesla, Spacex for many reasons. 401k match is not in top 10 list.
People can vote with their feet and move to another company, if 401k match is deal breaker.
[+] [-] selljamhere|5 years ago|reply
https://finance.yahoo.com/quote/TSLA/
[+] [-] Traster|5 years ago|reply
It's generally accepted that if you work with people and they contribute to your success you should recognise that and reward them rather than attempting to exploit their passion as far as possible. Elon Musk absolutely doesn't have to do that, but that doesn't mean people can't judge him for being an asshole.
[+] [-] tidwall|5 years ago|reply