Andrew here, with breaking news: Tesla’s board just proposed a new pay package for Elon Musk that could be worth more than $1 trillion if — and only if — the company achieves eye-opening milestones that would make it one of the most valuable in history. Musk would receive an additional 1 percent stake when Tesla’s market cap reached $2 trillion, another 1 percent at $3 trillion, and so on. He must also meet operational goals like more than tripling Tesla’s earnings.
These numbers sound fanciful, and even the company calls them “aspirational.” But the truth is, the deal is the most honest attempt at pay-for-performance by any company out there. He gets nothing if he doesn’t reach the milestones, and must also hold the shares for at least seven and a half years to cash in any of the stock. One other proposal worth highlighting: Shareholders will be asked whether Tesla’s board should consider making an investment in xAI, Musk’s artificial intelligence business. (Its Grok A.I. model is already being used inside Tesla vehicles.) A yes vote could open the door to an investment or even a takeover, and would most likely protect the board from accusations of self-dealing.
Critics of Musk’s previous pay package — many of whom will probably dislike this one — have said that he already has plenty of incentives to work hard at Tesla, including how many shares he already owns. (Jeff Bezos, for example, never received additional Amazon stock beyond his founding stake.) But the practical reality is that Musk has interests in a number of other companies, including xAI, SpaceX and Neuralink, that make keeping him focused on Tesla difficult.
Jobs and the Fed
Investors are on tenterhooks for Friday’s jobs report, which will offer new clues on the economic fallout from President Trump’s trade war, and may guide the Fed’s next moves on interest rates.
It’s the first report since Trump fired the head of the Bureau of Labor Statistics, which compiles the data, after a lackluster showing. And it comes as he seeks more control over the Fed. But the markets are looking up, with the S&P 500 at a high, as investors appear more focused on the shorter-term prospect of lower borrowing costs.
A hot jobs number could scramble the rates outlook. Wall Street’s estimates are all over the map. Consider:
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Payroll additions are seen as having risen by about 110,000 in August, up sharply from the 73,000 added in July, according to economists polled by FactSet. A Bloomberg survey forecasts 75,000 jobs had been created. And Goldman Sachs economists reckon it’s closer to 60,000, believing that federal government job cuts limited overall gains.
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The most pessimistic economists see unemployment having risen by 0.1 percentage point, to 4.3 percent.
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Watch for revisions to previous reports. Some economists expect to see more downside adjustments, given Trump’s immigration crackdown and growing layoffs in some sectors.
The report follows a string of lackluster economic data — including Thursday’s ADP private payrolls report and the publication Wednesday of the Fed’s beige book of regional indicators — that show employers have curtailed hiring and that economic growth is slowing.
And then there’s the Fed. Thursday saw fireworks at a hearing of the Senate Banking Committee, as Stephen Miran, a top White House economic adviser, testified in support of his nomination to serve until January as a Fed governor. The Trump administration wants him to be confirmed in time for the Fed’s next rate-setting meeting later this month.
Miran stunned some Democrat senators when he testified that, should he be confirmed, he intended to take an unpaid leave of absence from his White House job — instead of resigning that role altogether. It would be the first time in nearly a century that an executive branch employee would become a Fed governor.
Democrats argued that arrangement meant Miran was not independent, despite his assurances. “You are going to be technically an employee of the president of the United States but an independent member of the board of the Federal Reserve?” asked Senator Jack Reed, Democrat of Rhode Island. “That’s ridiculous.”
Still, Miran is expected to be confirmed. That has added to bets for a bevy of rate cuts, with the futures market on Friday pricing in more than four through next June’s meeting.
One new question: Is this actually his audition for a bigger role, like, say, as the next Fed chair?
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In other Fed news, the Justice Department has reportedly opened a criminal investigation into Lisa Cook, the Fed governor whom Trump is trying to oust over allegations of mortgage fraud, according to The Wall Street Journal.
HERE’S WHAT’S HAPPENING
Chinese hackers may have stolen data from nearly every American, experts say. A cyberattack by the group known as Salt Typhoon — an assault that has targeted nearly 80 countries — was broader than previously understood, and may have led to the astonishingly large data collection, The Times reports. U.S. officials said the Salt Typhoon incident, which compromised telecom, internet service, lodging and transportation companies, showed how China’s largely state-backed cyber capabilities have become a disruptive global force.
Broadcom shares soar on report of a deal with OpenAI. Bloomberg reports that the chipmaker is said to be in talks to design advanced chips for the ChatGPT maker, potentially taking business from Nvidia. Elsewhere, Anthropic is said to be ending the sales of its A.I. services to Chinese majority-owned companies on national security grounds, according to The Financial Times.
Boeing plans to hire permanent replacements for striking workers. The company said the move comes after talks broke down with the union representing 3,200 employees at three Midwestern factories who walked off the job last month. It is the latest labor standoff for Boeing, which is pursuing an extensive turnaround plan.
Forecasting Armani’s future
The fashion world is reckoning with the death of Giorgio Armani, the self-described “designer-businessman” whose clothes defined luxury and power for decades.
But beyond the tributes to the Italian’s fashion legacy, there’s a multibillion-dollar question: What lies ahead for his namesake business, perhaps the biggest independent Italian fashion house left in an era of luxury conglomerates?
The stakes: At the time of his death, at age 91, Armani’s net worth was estimated at about $12 billion — nearly all of which was attributed to his ownership of his luxury business. Giorgio Armani S.p.A., which includes clothing, accessories, home interiors and more, reported $2.65 billion in revenue in 2023.
For decades, Armani had repeatedly rebuffed approaches to sell. He managed to keep Armani S.p.A. independent even as the French luxury empires LVMH and Kering vacuumed up scores of fashion labels. And Prada earlier this year bought Versace for nearly $1.4 billion.
Armani went so far as to create the Giorgio Armani Foundation, which was tasked with overseeing charitable endeavors — and protecting his company from unwanted advances. That foundation, as well as a handful of relatives and confidants, is set to inherit his holdings.
Armani never ruled out an eventual deal for his company. He told Bloomberg last year that while he didn’t foresee a sale to a big conglomerate, “I don’t want to exclude anything a priori because that would be an ‘unentrepreneurial’ course of action.”
Another possibility is a stock market listing, though corporate governance documents reviewed by Reuters in 2023 showed that such a move couldn’t happen until five years after Armani died.
But there’s a lot of complications to consider:
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Among the reasons Armani was able to rebuff takeover interest in the past was his demand for a huge price tag. It’s not clear that even LVMH — whose leader, Bernard Arnault, was close to Armani — let alone the embattled Kering, would pay up.
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Perhaps a more logical buyer would be L’Oreal, which already produces Armani cosmetics.
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Though the Armani brand remains popular worldwide, it hasn’t been a major influence in fashion in years. Without its magnetic eponymous founder to command attention, can the company still be relevant — and command the kind of premium Armani would have wanted?
Pic of the day
Tech titans, including Meta’s Mark Zuckerberg, Apple’s Tim Cook, Alphabet’s Sundar Pichai and OpenAI’s Sam Altman, convened at the White House last night for dinner with President Trump. They talked up their vision for artificial intelligence and thanked the president for his support of the sector.
At one point, Trump asked Cook to clarify how much Apple planned to invest in the U.S. “Six-hundred-billion,” the C.E.O. replied, adding, “We’re very proud to do it.”
Talking A.I. with the C.E.O. of Pearson
Every week, we’re asking a C.E.O. how he or she uses generative artificial intelligence. Omar Abbosh, the C.E.O. of the education software company Pearson, told DealBook that he prompts A.I. to challenge his ideas and offer ways to make them functional.
How do you personally use A.I.?
My oldest boy, who is a great cook, will tell you that his dad is not. However, I found that when I input the ingredients I have into ChatGPT and say, give me a recipe or two, it has made me better.
At work I use A.I. more as a thought partner. In this position, you can’t always think aloud. But I can prompt it to be a devil’s advocate and challenge me. I basically say, “Tell me all the logic flaws in my argument.” And the other prompt I use is, “I want you to help me think about how to enrich this argument” — where I can find great data sources or how I should challenge myself.
What directives have you given your employees on A.I.?
When I joined Pearson in January of last year, our guidelines for using A.I. basically said, “Don’t use it.” I totally disagree with that. I want all employees to use it, but within a security and privacy perimeter.
It’s easy to do proof of concept, and it’s very hard to scale across thousands of facilities or a hundred million customers. We’re moving toward a fairly strict approach to what I call a functional and a technical architecture — things like, if you want a functionality to help a student log in, then we’ll build a common service to use across all the products. I can do exactly the same thing with the A.I. common services, like a translation capability.
I’ve got a team of deep data scientists and A.I. gurus who work across all the different product teams and furnish them with these common services. And that’s how you make sure you’re building stuff that’s going to scale.
THE SPEED READ
Deals
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Tether is said to have held talks to invest in gold-mining companies, raising eyebrows in the natural resource industry. (FT)
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“The Kelce Brothers’ Garage Beer Company Is Now Worth $200 Million” (WSJ)
Politics, policy and regulation
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The F.T.C. reportedly plans to study the potential harmful effects of chatbots on children who use them. (Bloomberg)
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Harvard may have scored a major legal victory to get its funding restored. Whether it actually receives the money is unclear. (NYT)
Best of the rest
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“Ticketmaster Just Locked You In A New Legal Prison” (The Lever)
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Lasers, fireworks and a cage-fighting ring on the South Lawn: Inside Dana White’s plan to bring the Ultimate Fighting Championship to the White House next year. (WSJ)
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Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Sarah Kessler is the weekend edition editor of the DealBook newsletter and writes features on business.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
Niko Gallogly is a Times business reporter, covering diversity and environmental and social justice efforts in corporate America. Email them at [email protected].
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