FT says Mur­doch in line for Tesla chair. Musk re­ply: in­cor­rect

Business World - - World Business -

SAN FRAN­CISCO/BOS­TON — Out­go­ing Twenty-First Cen­tury Fox, Inc. Chief Ex­ec­u­tive Of­fi­cer (CEO) James Mur­doch is the lead can­di­date to re­place Elon Musk as Tesla, Inc. chair­man, the Fi­nan­cial Times (FT) re­ported on Wed­nes­day, but Mr. 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, Mr. Musk and US reg­u­la­tors in the wake of Mr. Musk tweet­ing in Au­gust that he had se­cured fund­ing to take the elec­tric car maker pri­vate.

The Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) set­tle­ment capped months of de­bate and some in­vestor calls for stronger over­sight of Mr. Musk, whose re­cent er­ratic pub­lic be­hav­ior raised con­cerns about his abil­ity to steer the money-los­ing com­pany through a rocky phase of growth.

The US SEC, which said Mr. 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.

Mr. Musk had said he was con­sid­er­ing tak­ing Tesla pri­vate at a price of $420 a share, a num­ber that is slang for mar­i­juana. He tweeted the three-word de­nial of the Fi­nan­cial Times story, on Wed­nes­day at 4:20 p.m. PT (2320 GMT), about six hours af­ter the news­pa­per’s post.

In a vote of con­fi­dence for Mr. 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% at the end of Septem­ber from just un­der 7% in June.

The Fi­nan­cial Times cited two peo­ple briefed on dis­cus­sions say­ing Mr. Mur­doch was the lead can­di­date for the job.

Mr. Mur­doch, al­ready an in­de­pen­dent di­rec­tor of Tesla, has sig­naled 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.

Mr. Mur­doch could not im­me­di­ately be reached for com­ment. Tesla did not re­spond to a re­quest for com­ment. Twenty-First Cen­tury Fox de­clined to com­ment.

Mr. 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 Mr. Musk led to the com­pany’s ad­di­tion of two in­de­pen­dent di­rec­tors, in­clud­ing Mr. 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 Mr. 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 Mr. Mur­doch al­ready served on too many boards.

Mr. 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

JAMES MUR­DOCH, the son of me­dia mogul Ru­pert Mur­doch, and his wife Kathryn Huf­schmid ar­rive for a re­cep­tion to cel­e­brate the wed­ding be­tween Ru­pert Mur­doch and for­mer su­per­model Jerry Hall which took place on Fri­day in Lon­don, Bri­tain, March 5, 2016.

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