These Five Leaders Are on the Hot Seat in 2019

Mark Carney

(Bloomberg Businessweek) -- There is no precedent for the situation Bank of England Governor Mark Carney may find himself in next year. If the U.K. crashes out of the European Union in March without a deal, he’ll be on the front line of efforts to repair the damage.

A swift drop in the pound would likely be the most immediate reaction, as it was in the aftermath of the Brexit referendum in 2016. But the dislocation of the British financial system and the potential disruption to transport and supply chains may inflict more lasting harm. The BoE’s response could include emergency interest-rate cuts to bolster growth—or even increases to support the currency—plus a flood of liquidity to banks.

The 53-year-old Canadian is operating in a politically toxic environment in which anything he says about the consequences of an ungraceful exit becomes fodder for public debate. His comments tend to incense pro-Brexit lawmakers, including Jacob Rees-Mogg, who’s dubbed Carney “the high priest of ‘Project Fear.’ ”

Of course, there’s always the chance that Brexit goes smoothly. In that case, the BoE may have to swiftly pivot from a stance of crisis-fighting to one of more conventional tightening. For Carney at least, the problem won’t last much beyond next year: After two extensions of his term, he’s pledged to leave his post in 2020. — Craig Stirling

Elon Musk

This was a tough year for Elon Musk, who navigated car production hell to finally bring Tesla Inc.’s Model 3 sedan to market but tried to take his company private via tweet—and got sued for it. Now, 2019 promises a number of other potential speed bumps.

While Tesla turned a corner in October after its initial stumbles trying to mass-manufacture an electric car for the first time, Musk still hasn’t delivered the $35,000 version of the Model 3 that he promised years ago would bring electrification to the mainstream. He’ll have to master the difficult balancing act of rolling out cheaper versions of his mass-market car to boost sales without sacrificing Tesla’s efforts to attain sustained profitability.

Complicating matters for Musk will be the decline in U.S. government incentives for buyers of electric vehicles. The $7,500 federal tax credit toward the purchase of Tesla’s EVs gets cut in half as of Jan. 1, then half again on July 1, now that Tesla’s total sales of new-energy vehicles have exceeded 200,000.

The company also faces financial challenges. It has a $920 million convertible bond coming due on March 1. Management hopes investors will swap that for stock, but if Tesla’s shares fail to reach $360 by then (they were about $340 on Nov. 13), the company will be on the hook to pay the money back. While the automaker is finally starting to generate cash, it’s still far from flush, with only about $3 billion left in its coffers.

Musk must contend with closer scrutiny from Tesla’s board in 2019. His run-in with the U.S. Securities and Exchange Commission over the botched buyout cost him the role of chairman, and two new independent directors will have to be appointed later this year. The SEC is also making Tesla adopt protocols to closely oversee Musk’s public communications—including his tweets. — Craig Trudell

Petro Poroshenko

Four years after a revolution toppled Ukraine’s Russia-backed leader, his replacement is struggling to cling to power.

Elections in spring 2019 pit the incumbent, Petro Poroshenko, against a packed field that includes Yulia Tymoshenko, a populist ex-prime minister and hero of the 2004 Orange Revolution against corruption in the electoral system. The early favorite going into next year, Tymoshenko’s campaigning in part on the idea that Poroshenko, a billionaire oligarch, is a servant of the country’s elite—a message that’s particularly damning in Europe’s second-poorest country.

Poroshenko isn’t without his achievements. He won visa-free travel in the European Union for Ukraine citizens and returned the economy to growth. But he’s also failed to end the Kremlin-backed war raging in Ukraine’s eastern Donbas region. Worse, he’s barely made a dent in graft. “The revolution gave Poroshenko an explicit mandate for the single most important task: rooting out the oligarchy and corruption,” says Lilit Gevorgyan, a senior economist at IHS Markit in London.

Poroshenko’s latest preelection promises are underwhelming: further EU integration and NATO membership, which remains years away even under the rosiest outlook. They may not be enough to save him. — Daryna Krasnolutska

Masayoshi Son

It seemed a courageous move. On Oct. 23, Masayoshi Son, the chief of Japanese tech conglomerate SoftBank Group Corp., pulled out of the Future Investment Initiative, a three-day conference in Riyadh hosted by Crown Prince Mohammed bin Salman. While dozens of other corporate leaders from around the world had already snubbed MBS as outrage spread over the apparent assassination of journalist Jamal Khashoggi by Saudi agents, the stakes were much higher for Son. In 2016 the crown prince committed an unheard-of $45 billion to SoftBank’s Vision Fund and stood ready to invest more. Ultimately, Khashoggi’s murder wasn’t enough to undo Son’s close ties to his Saudi patrons. On Nov. 5 he announced that SoftBank would continue investing for the kingdom.

Son isn’t the only mega-investor working with the Saudis—see the Q&A with Blackstone Group LP’s president—but his fund is a key player in Silicon Valley. Among the companies it’s invested in are Slack Technologies Inc. and WeWork Cos. If concern about Saudi money remains a hot issue, it could squelch the gusher of SoftBank capital that has swelled tech startup valuations. — Erik Schatzker

Evan Spiegel

He was once heralded as a genius for creating a teen obsession big enough to make Facebook Inc.’s Mark Zuckerberg envious. Now Snap Inc.’s Evan Spiegel has a disaster on his hands, one mostly of his own making.

The 28-year-old may be losing his touch after insisting on a Snapchat redesign that alienated both users and advertisers. The company has reported two straight quarters of declining user numbers, and its share price is hovering below $7, about 40 percent of last year’s initial public offering value. Since the IPO, Spiegel has cycled through his heads of product, sales, engineering, legal, and finance.

Meanwhile, Zuckerberg no longer has reason to be jealous. His apps copied one of Snap’s most popular formats, the ephemeral “stories” feature. It’s done so well, Zuckerberg said in late October, that he expects stories to eventually be more popular on his properties than the news feed ever was. If that’s Facebook’s future, Snap needs a new idea, fast. — Sarah Frier

To contact the editor responsible for this story: Jillian Goodman at jgoodman74@bloomberg.net, Eric GelmanCristina LindbladPat RegnierJeff MuskusJames Ellis

©2018 Bloomberg L.P.