Are chief executives getting more eccentric? It might seem so. From xenophobic rants on earnings calls to F-bombs and invocations of classical German philology, US corporate chieftains are ditching the script with abandon. It can be a red flag when the boss goes off piste. But, in some cases, it might be what turns oddball ideas into corporate empires.
The kind of eccentricity in question is less about personal style or leftfield hobbies, and more about an unconventional view of what companies are for. Take Palantir founder Alex Karp, who regularly describes his software consultancy as a weapon for killing enemies of the West. Meta Platforms founder Mark Zuckerberg is also guided by lofty if less violent visions, sinking $60bn into smart glasses and virtual reality headsets since 2020.
For old-world companies, eccentricity risks distracting the company from its product. In the new world, where investors seek abnormal returns from not yet realised cash flows, eccentricity is the product. The shift to private markets makes unconventional thinking more valuable. Companies seeking capital no longer woo buttoned-down institutions, but eccentric venture capitalists.
Being different pays off, at least in one way. Professors at Essec Business School and Stanford used machine learning to identify “performative atypicality” in company earnings calls. Their analysis essentially measured transcripts to see how much they differed from those of similar companies. They found that companies whose executive patter deviates from the norm won higher earnings estimates from analysts — although actual earnings often disappointed.
Elon Musk remains the eccentric CEO par excellence. He has, over the years, proposed nuking Mars, set far-fetched corporate targets that he then fails to meet, and casually suggested that carmaker Tesla is worth $10tn. Tesla’s shares have slid this year, but even before he became a White House adviser, private valuations of his unlisted companies SpaceX and xAI continued to rise.
It is no accident that eccentricity is more commonplace in the US. One factor is the greater prevalence of super-voting shares, which in effect let founders drive the bus in the direction of their choice without opposition. Morningstar analysts found at least eight shareholder motions that would have passed if not for insiders with outsized votes skewing the outcome — including two at Meta Platforms.
Wonky governance alone does not explain it, though. Musk, for example, does not control Tesla through super-voting shares. One alternative possibility is that when growth seems abundant, investors are more tolerant of oddities. The researchers on performative atypicality found that in times of rising stocks, deviation from the regular script increases.
Perhaps slower growth and more checks on CEO power explain why Europe has failed to embrace corporate eccentricity to anything like the same extent as the US — which in turn is one reason it has yet to produce a Tesla, a Palantir or a Meta. If it wants to compete, the continent might have to embrace a greater sense of strangeness.
john.foley@ft.com