Tesla names new board chair in fraud set­tle­ment

Denholm in, Musk still chief ex­ec­u­tive

The Washington Times Daily - - NATION - BY TOM KRISHER

DETROIT | Tesla’s board has named one of its own as chair­man to re­place Elon Musk, com­ply­ing with terms of a fraud set­tle­ment with U.S. se­cu­ri­ties reg­u­la­tors.

The elec­tric car and so­lar panel com­pany’s board on Thurs­day named Aus­tralian telecom­mu­ni­ca­tions ex­ec­u­tive Robyn Denholm as chair­man, ef­fec­tive im­me­di­ately.

Ms. Denholm will step down as chief fi­nan­cial of­fi­cer and strat­egy head at Tel­stra, Aus­tralia’s largest telecom­mu­ni­ca­tions com­pany, af­ter a six-month no­tice pe­riod. She will work full-time at Tesla, where she has served on the board since 2014.

Mr. Musk will re­main as Tesla’s chief ex­ec­u­tive as part of the set­tle­ment deal with the U.S. Se­cu­ri­ties and Ex­change Com­mis­sion. The U.S. agency filed a law­suit al­leg­ing that Mr. Musk duped in­vestors in Au­gust with mis­lead­ing state­ments on Twit­ter about se­cur­ing the fund­ing to take Tesla pri­vate.

The move vaults Ms. Denholm, 55, from rel­a­tive ob­scu­rity into a high-pro­file po­si­tion of try­ing to rein in Mr. Musk and man­age a com­pany that is strug­gling to pro­duce ve­hi­cles and make money as it at­tempts to shift the world from fuel­ing trans­porta­tion with oil to bat­tery­pow­ered elec­tric ve­hi­cles.

“I be­lieve in this com­pany. I be­lieve in its mis­sion and I look for­ward to help­ing Elon and the Tesla team achieve sus­tain­able prof­itabil­ity and drive long-term share­holder value,” Ms. Denholm said in a state­ment.

Crit­ics of Tesla’s board have said mem­bers lack in­de­pen­dence and are too closely al­lied with Mr. Musk, many through fi­nan­cial deals. Mr. Musk’s brother, Kim­bal, is one of the mem­bers.

Although Ms. Denholm ap­pears to have fewer ties to Mr. Musk than other di­rec­tors, she still was on the board through nu­mer­ous cases of bizarre be­hav­ior by Mr. Musk, in­clud­ing his sur­prise tweet to take Tesla pri­vate, smok­ing what looked like mar­i­juana dur­ing a YouTube in­ter­view, and la­bel­ing a Bri­tish diver a pe­dophile in a dis­pute over the res­cue of Thai youth soc­cer play­ers who were trapped in a cave.

A cor­po­rate gov­er­nance ex­pert ques­tioned whether Ms. Denholm is the right per­son for the job, given that she was a mem­ber of Tesla’s board for four years yet failed to rein in the vi­sion­ary yet er­ratic Mr. Musk.

“She was there while all of this was go­ing on,” said Charles El­son, direc­tor of the cor­po­rate gov­er­nance cen­ter at the Univer­sity of Delaware. “Do you ask the per­son who helped get you lost in the woods to help drive you out of the woods?”

Mr. El­son said the com­pany should have brought in some­one from out­side to be chair­man, and that no mat­ter how tal­ented Ms. Denholm may be, she has a shadow over her of be­ing on the board that did lit­tle as Mr. Musk mis­be­haved.

“You re­ally have got to won­der,” he said. “No other CEO of any other pub­lic com­pany would have sur­vived this.”

Mak­ing Ms. Denholm a full-time chair also cre­ates gov­er­nance prob­lems be­cause she could be­come a Tesla ex­ec­u­tive, blur­ring her role as an in­de­pen­dent check on man­age­ment, Mr. El­son said.

Email mes­sages sent to Ms. Denholm Thurs­day were not im­me­di­ately re­turned.

There was lit­tle re­ac­tion to the ap­point­ment from the mar­kets Thurs­day. Tesla shares rose slightly to $349.34 in pre­mar­ket trad­ing.

Un­der the set­tle­ment, Tesla also is re­quired to ap­point two new in­de­pen­dent di­rec­tors, and it must re­view the some­times-er­ratic Mr. Musk’s posts about the com­pany on Twit­ter. Mr. Musk and Tesla each had to pay a $20 mil­lion penalty un­der the Septem­ber deal with the SEC, and he can­not re­turn as chair­man for three years.



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