"For those who want to know the extent of my golddigging, this is what I asked for, from my ex-husband and the father of my five children Elon Musk, who is a billionaire* and utterly brilliant.
* albeit with cash/liquidity issues, which I would work with him to work around"
He is an inspirational dude. I can't find a direct quote, but when I read the article posted here some time ago (http://news.ycombinator.com/item?id=458090) I got the sense that he wants to change the world, and potentially going broke doing it is an unfortunate but permissible side-effect. Given the various posts about "what to do with my millions" today, I think what Musk has chosen to do with his capital provides a poignant perspective.
"[Community property is fine if] no one stands to lose besides you, but I feel like it'd be personally pretty irresponsible of me to enter into a situation where divorce could ruin not just my business and life, but my staff, suppliers, clients, and people who count on me. Some people might say, "But if you have a great marriage and pick the right woman it wouldn't happen!" To that I say... Everyone thinks that way and quite a few of them turn out to be mistaken... I don't think my judgment is infallible, and I refuse to put other people's lives and livelihood unnecessarily at risk."
I'm starting to think there's a societal shift in that direction. LeBron James is one of the most successful and high profile athletes on the planet, has two children with his girlfriend while unmarried, and he doesn't get any flak for it. His Wikipedia page just says:
"James has two children with his high school sweetheart, Savannah Brinson. The first, LeBron James Jr., was born on October 6, 2004,[70] and the second, Bryce Maximus James, on June 14, 2007."
I think there's a bit of a generational gap. I see a line around people who were born roughly before or after 1970. People who came of age in the 1980's or later seem to be much less fazed by the idea of a man not merging finances in the traditional way.
I'm not entirely sure why, maybe some sort of view taking hold that you're doing incredibly important things, then the traditional economic marriage arrangement means you stand to lose a lot. Combine that with the fact that even someone trying their best and generally upholding their end of the marriage bargain can be divorced against their will and I think some people are seeing it as a bad arrangement to get into.
I think about this sometimes, but I haven't fully flushed it out in my mind. Anyone else have thoughts on the topic?
I'm the author of three published novels: the dark
fantasies BLOODANGEL and LORD OF BONES (Roc/Penguin) and
the YA supernatural thriller UNINVITED
(MTV/Simon&Schuster). I also have stories in the MAMMOTH
BOOK OF VAMPIRE ROMANCE 2 and ZOMBIES: ENCOUNTERS WITH THE
HUNGRY DEAD.
alimony and child support
6 million cash
10 percent of his stock in Tesla
5 percent of his stock in SpaceX
(and he retains all voting rights)
and a Tesla Roadster (I really, really want one...)
I don't want to go through the trouble of normalizing this wish list into a scalar percentage, but it seems like a lot less than half of his assets...
> I don't want to go through the trouble of normalizing this wish list into a scalar percentage, but it seems like a lot less than half of his assets...
Yeah, I thought so too, so I figured she must be really, really cool and grateful to be with such an amazing guy and have kids with him and an amazing life, so she wanted to keep it friendly and not try to take him to the cleaners.
Then I read a couple of her blog posts, and no, she doesn't seem like she wants to keep it friendly. So I was confused, and did some Googling:
"The case highlights an aspect of Orange County and other Southern California divorce proceedings that is not often publicized: the post-marital agreement (which is less well-known, at least to the public, than are prenuptial agreements). Justine contends that the agreement she signed shortly after the couple wed is "extremely harsh" and has asked the California divorce court to throw it out."
I am not a lawyer and, not having read the Musks’ post-nup, I have no opinion about whether or not it is valid.
However, every real-world legal system since the beginning of time has put limits on what kinds of signed agreements between two people can be enforced as contracts under the law, and everyone who has run a multimillion-dollar businesses is aware of this. If the contract that Mrs. Musk signed was unconscionably unfair to her, Mr. Musk probably should not have drafted it in the first place.
If my wife got rich and, God forbid, we got a divorce, and I offered to let her keep a lot more than half of the marital assets, and she demanded an even larger share, I might lose my motivation to “keep it friendly”.
"The irony of this whole thing is that I don't want hundreds of millions of dollars. I think my ex-husband is brilliant and works like a demon and deserves his success and his wealth. But I also think -- after eight years of marriage and six kids (five surviving) -- that I am entitled to a fair settlement..."
http://moschus.livejournal.com/140502.html
I think her demands are surprisingly reasonable, with the exceptions being the stakes in Tesla and SpaceX, which I think Elon doesn't want to give her for understandable reasons (IPO Complications, Pride, etc.).
She ostensibly raised his kids, and made a lot of sacrifices for "his" work. I don't know, but I would guess there were a lot of nights alone with the kids. That's work too. She could've married someone who would work 9 to 5 and come up and help with the household. She didn't, she took on that extra burden, just as he took on the extra burden of his startups. They both took on a burden to make that possible.
Spouses bare a significant amount of the risks and emotional hardships of founders. They can be up late, discussing ideas into dawn, making food, or educating/entertaining their five children as one digs in. Being married to a founder could represent a moral weight that's probably equivalent to that of the earliest early employees -- if they truly do support it.
Those numbers and the article don't seem to make the "ran out of cash" part due to a divorce add up. He made $17m per year on average for years, and having to pay $6m is what bankrupted him? I.e. losing a mere four months' income? It seems the worst it could've done is advanced his impending cash crunch by a few months, if he was already burning through cash at such a rate.
Messy divorces are one very good reason for extremely strict shareholder agreements in startups.
Startups can definitely cause bumps in your relationships with others, including your spouse and a messy divorce with a large enough block of shares at stake in a startup can kill the startup, at a minimum it will kill the chance of finding funding until the whole thing has played out and that can take years.
Elon Musk is the best thing that happened to electric cars since the early 1900's, it would be a pity if this divorce caused that to be torn apart.
How does this all relate to SpaceX, is there any chance of fall-out in that direction ?
I agree completely with the need for shareholder agreements.
As for SpaceX, they almost certainly have a milestone payment after the Falcon 9 test flight in the next few weeks. That and they'd make a good investment for anyone who would like to use their services in the future, both satellite and manned space flights.
Edit: They are due $5m in payments after the Falcon 9 flight.
Interesting. I just read Tony Hsieh's book (CEO of Zappos) and he has a similar story where he actually almost went broke at one point (down from maybe $100m net worth) trying to keep Zappos alive as it's sole investor when everyone else backed out.
Of course, he ended up selling it to Amazon for over a billion, so it worked for him. Hope it also works out for Elon. It's a testament to how much he really believes in the company.
Hehe, nothing like divorce case to make a billionaire plead poverty. If, God forbid, Melinda ever divorces Bill, I expect him to argue that those Microsoft shares are really not worth the paper they are printed on.
I think what he's doing with Tesla and SpaceX are very important for the country and really the world, so I hope enough folks with deep pockets can step up to the plate and help out his/their cash situation. We need more companies/endeavors like Tesla and SpaceX.
Musk participated in every single funding round for Tesla, until the last one. The fact that the company no longer has a source of investment that it has depended on since its inception is pertinent.
And since Musk has so much money invested and such a big chunk of the company, I'm sure his personal finances have come up more than once in the board room.
Did the article change? Currently it reads "According to the filing — part of his pending divorce case from sci-fi novelist Justine Musk" which answers your question succinctly.
It's a float issue. not like he's totally broke or financially incapable of taking future risks in his capacity with Tesla.