Tesla names 2 new directors in SEC deal
NEW YORK — Tesla named two independent board members Friday as part of a settlement with U.S. regulators who demanded more oversight of Chief Executive Officer Elon Musk.
Oracle co-founder Larry Ellison and Kathleen WilsonThompson, an executive vice president at Walgreens Boots Alliance, join the board as independent directors, effective immediately.
Musk got into trouble with the Securities and Exchange Commission in early August when he said in a tweet that he had “funding secured” to take the electric car company private at $420 per share.
The SEC accused Musk of committing securities fraud, saying that the funding had not been secured and that he had duped investors who drove shares of Tesla up by 11 percent on the day of the tweet. Several weeks later, Musk said the go-private deal was off.
Regulators initially wanted to force Musk out of his job as CEO, but agreed to accept $20 million in penalties from both Musk and Tesla. Musk did agree to step down as chairman for at least three years, but acknowledged no wrongdoing.
Despite the agreement, Musk has continued to clash with regulators.
Just days after settling the case, Musk taunted the government via Twitter, referring to the SEC as the “Shortseller Enrichment Commission.”
Musk has had a long-running feud with short sellers, a category of investors that have bet that the price of Tesla stock will fall.
So far, Musk is winning that fight. Shares of Tesla Inc. are up more than 20 percent since his clash with the SEC. Shares rose 5.6 percent Friday.
Tesla named Australian telecommunications executive Robyn Denholm as board chairman last month as part of its agreement with the SEC. Although Denholm brings much-needed financial and auto industry expertise to Tesla — which has struggled to produce cars and make money — there hasn’t been a marked change in Musk’s unorthodox behavior, at least when compared with other chief executives at major corporations that are publicly traded.
Tesla shares slumped 6 percent in early September after Musk was seen appearing to smoke marijuana during an interview that made the rounds on YouTube.
Earlier this month, Musk also dismissed the idea that Denholm could exert control over his behavior, saying in an interview with 60 Minutes that “It’s not realistic in the sense that I am the largest shareholder in the company.”
And Ellison, one of the most recognizable names in Silicon Valley, revealed in October that not only was Tesla his second largest investment, but also that he and Musk are close.
“I’m very close friends with Elon Musk, and I’m a big investor in Tesla,” Ellison said.