FT says; Murdoch in line for Tesla chair. Musk replies; incorrect
SAN FRANCISCO/BOSTON: Outgoing Twenty-First Century Fox Inc Chief Executive James Murdoch is the lead candidate to replace Elon Musk as Tesla Inc chairman, the Financial Times reported on Wednesday, but Musk in a tweeted reply to the newspaper said, ‘This is incorrect.’
Tesla has until Nov 13 to appoint an independent chairman of the board, part of settlements reached last month between Tesla, Musk and US regulators in the wake of Musk tweeting in August that he had secured funding to take the electric car maker private.
The SEC settlement capped months of debate and some investor calls for stronger oversight of Musk, whose recent erratic public behavior raised concerns about his ability to steer the moneylosing company through a rocky phase of growth.
The US Securities and Exchange Commission, which said Musk’s tweeted statements about going private were fraudulent, allowed the billionaire to retain his role as CEO while requiring he give up his chairmanship.
Muskhadsaidhewasconsidering taking Tesla private at a price of US$420 a share, a number that is slang for marijuana.
He tweeted the three-word denial of the Financial Times story, on Wednesday at 4.20pm PT (2320 GMT), about six hours after the newspaper’s post.
In a vote of confidence for Musk, shareholder T Rowe Price Group Inc said in a regulatory filing on Wednesday that it had raised its stake by nearly half to 10.2 per cent at the end of September from just under 7 per cent in June.
The Financial Times cited two people briefed on discussions saying Murdoch was the lead candidate for the job. Murdoch, already an independent director of Tesla, has signalled he wants the job, the report said.
The son of Fox mogul Rupert Murdoch, he joined Tesla’s board last year after years of work with media companies. He has no experience in manufacturing and has never led a company that makes cars or electric vehicles.
Murdoch could not immediately be reached for comment. Tesla did not respond to a request for comment. Twenty-First Century Fox declined to comment.
Musk is the public face of Tesla, and any chairman would have to contend with his powerful personality. Thanks to his vision and audacious showmanship, Tesla’s valuation has at times eclipsed that of traditional, established US automakers with billions in revenues and the company has garnered legions of fans, despite repeated production issues.
“The question when it comes to James Murdoch is, ‘Is he the guy who’ll be able to establish that level of authority with Elon Musk?’” asked Abby Adlerman, CEO of Boardspan, a corporate governance consulting company.
Investor concerns that Tesla’s board was too closely tied to Musk led to the company’s addition of two independent directors, including Murdoch, in July 2017.
Earlier this year, leading US proxy advisers Glass Lewis & Co and Institutional Shareholder Services, and union-affiliated investment adviser CtW Investment Group, had recommended investors cast votes ‘against’ the re-election of Murdoch as a Tesla director at the company’s annual meeting held on June 5. While CtW cited a lack of relevant experience and a “troubled history as an executive and director,” both proxy firms warned that Murdoch already served on too many boards.
Murdoch currently serves on the boards of Twenty-First Century Fox and News Corp. He stepped down from the board of Sky Plc on Tuesday following the completion of Comcast Corp’s takeover of the broadcaster. — Reuters