By Matthew R. Lyon*
Using Elon Musk as a case study, this Article provides a profile of the “superstar CEO.” Silicon Valley tends to swoon over corporate leaders, particularly founders, who are charismatic, confident, and sound more like they are leading a movement than a company. In recent years, “founder-friendly” venture capitalists have allowed entrepreneurs to keep their leadership positions as the company matures, and governance structures have been put in place to protect founders and surround them with friendly directors and officers. This can become a problem for shareholders if the high-profile CEO, through misfeasance or malfeasance, becomes more damaging than beneficial to the corporation. After presenting a character profile of the “superstar CEO,” the Article will analyze the board’s role in overseeing the CEO, and how that becomes more challenging structurally if good corporate governance practices are not established early in the corporation’s lifecycle. It then turns to whether courts, through the shareholder derivative action, or regulators, through SEC oversight, can be a sufficient backstop to protect shareholders when boards fail to act. Throughout, the Article reflects on the enigmatic Elon Musk and his relationship with Tesla shareholders as an illustration of both the benefits and downsides of the CEO as superstar.