The Hamilton Spectator

Tesla Leader Criticized for Oversight of Musk

- By NATASHA FROST and JACK EWING

MELBOURNE, Australia — Elon Musk, the chief executive of Tesla, is constantly making news and broadcasti­ng his opinions on his social media site, X. But the electric car company has another leader, who maintains a much lower profile.

For more than five years, Tesla’s board has been led by Robyn M. Denholm, a technology executive who rarely speaks in public outside her native Australia and posts barely anything on X.

To some analysts and investors, Ms. Denholm is the “adult in the room” who has helped Mr. Musk turn Tesla into the world’s most valuable automaker. But to her critics, she has failed at her most important job: serving as a check on Mr. Musk.

In January, a Delaware judge sharply criticized Ms. Denholm’s leadership while striking down Mr. Musk’s 2018 compensati­on package, which is worth over $50 billion. Ms. Denholm took a “lackadaisi­cal approach to her oversight obligation­s” at Tesla, said Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery.

The judge also questioned whether Ms. Denholm could be independen­t from Mr. Musk, because her job on Tesla’s board had earned her over $280 million. That greatly exceeds what other large U.S. companies like Apple and Alphabet, Google’s parent, pay the independen­t chairs on their boards.

“Musk operates as if free of board oversight,” the judge said in her ruling.

Mr. Musk has railed against the ruling and said he planned to ask shareholde­rs to authorize Tesla to move its incorporat­ion to Texas, where it has its headquarte­rs. The ruling also means the board must fashion a new pay package for him.

Separately, two weeks before the Delaware ruling, Mr. Musk demanded that Tesla’s board significan­tly increase his control over the company if it wanted him to continue developing products based on artificial intelligen­ce.

Ms. Denholm will be closely involved in these potential decisions. She has said nothing publicly about these matters and did not respond to a request for an interview.

Ms. Denholm, 60, has spent over 40 years in operationa­l and financial jobs at big companies in Australia, including Toyota, and in the United States. She is widely considered a calm, understate­d presence with an appetite for occasional calculated risks.

She was not acquainted with Mr. Musk before 2014, when a member of Tesla’s board recruited her, according to legal filings. While she has praised Mr. Musk’s vision, discipline and resilience in interviews, she has mostly avoided discussing him or his erratic comments on X.

Conor Wynn, an expert in corporate decision-making at Monash University in Melbourne, Australia, said Mr. Musk might have chosen Ms. Denholm because she was so different from him and had skills he might not have. But other experts said Ms. Denholm’s job was not just to complement Mr. Musk.

“It was hoped she would be the adult in the room, possibly even a mother figure who could tame this wild child,” said Jo-Ellen Pozner, associate professor of management at Santa Clara University in California. “That has clearly not happened.”

But, Ms. Pozner said, Ms. Denholm may not have been able to manage Mr. Musk because almost all of the other directors have personal or financial ties to him. One board member is his brother, Kimbal.

“It doesn’t seem like she was set up for success in reining in Elon Musk,” Ms. Pozner said.

 ?? PETER RAE/EPA, VIA SHUTTERSTO­CK ?? Robyn M. Denholm is leading Tesla’s board amid looming decisions about Elon Musk’s demand for more control.
PETER RAE/EPA, VIA SHUTTERSTO­CK Robyn M. Denholm is leading Tesla’s board amid looming decisions about Elon Musk’s demand for more control.

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