Tesla added Larry Ellison and Kathleen Wilson-Thompson to its board, fulfilling the terms of the settlement reached with US securities regulators over its CEO's problematic posts about taking the company private.
Mr Ellison, the co-founder of Oracle, and Ms Wilson-Thompson, the global chief human resources officer of Walgreens Boots Alliance, join a board the Securities and Exchange Commission ordered to step up its governance and oversight measures after Elon Musk claimed in August to have had the funding and investor support for a buyout. The chief executive officer relinquished the role of chairman in November, and both he and the company agreed to pay $20 million (€17.4 billion) in penalties.
The new additions to the board put a bookend on a months-long distraction that at one point looked like it may have cost Mr Musk his future with the company. While reining him in may prove challenging, they’ll help steer a carmaker that’s made significant strides in profitably making and delivering electric vehicles.
Tesla’s shares rose 1.3 per cent to $320.26 in New York after earlier gaining as much as 6 per cent. The stock was up 1.5 per cent this year through the close Thursday.
Friend
Mr Ellison (74) went off-script during an Oracle meeting with analysts in October to announce that he had been building a personal stake in Tesla and that it was his second-largest holding. He criticised how the media had covered Mr Musk (47) whom he called a close friend.
“This guy is landing rockets,” Mr Ellison said in October of Musk, who also runs Space Exploration Technologies. “You know, he’s landing rockets on robot drone rafts in the ocean. And you’re saying he doesn’t know what he’s doing. Well, who else is landing rockets? You ever land a rocket on a robot drone? Who are you?”
Tesla said in its statement announcing Mr Ellison would be joining the board that he purchased 3 million shares of the electric-car maker earlier this year.
Tesla’s board now has 11 members, including three women. This autumn, California became the first US state to mandate that publicly traded companies have women on their boards. Those with at least seven directors need to have at least three women by 2021.
Funding
The SEC moved to punish Tesla and Mr Musk because it alleged he committed fraud by tweeting that he had the “funding secured” to take the company private at $420 a share. The agency said this and other claims the CEO made on August 7th were false and misleading and impacted Tesla’s stock.
Mr Musk and Tesla reached the settlement with the SEC on September 29th that gave the company 90 days to add directors and take other actions. Since then, the CEO has publicly lampooned the agency and bristled at the notion that he’ll change his Twitter habits.
Tesla’s legal department also has been going through shakeups since Musk’s run-in with the SEC.
The company tapped Dane Butswinkas, the Washington trial lawyer who represented the CEO in his legal battle with the agency, earlier this month to become general counsel. He’ll replace Todd Maron, who’s leaving Tesla in January after five years. Before he joined the company, he represented Musk through two divorces.
In November, Phil Rothenberg, a vice-president on Tesla’s legal staff, left to became general counsel at Sonder, a hospitality startup. Rothenberg previously worked at the SEC.– Bloomberg
