Tesla names two new directors
Just under the wire of a deadline set by the U.S. Securities and Exchange Commission, Tesla announced two new independent directors Friday, naming Oracle founder Larry Ellison and Kathleen Wilson-Thompson, a Walgreens Boots Alliance executive, to its board.
The move is part of a settlement the electric vehicle company reached with the regulator in September following CEO Elon Musk’s tweets about having “funding secured” for taking the company private. He reversed his plans just days later, causing Tesla’s stock price to plunge.
In Ellison, Tesla adds a fellow entrepreneur and billionaire with a celebrity profile who has a reputation as being one of high tech’s most hyper-competitive figures; Ellison has also been a sharp defender of Musk and is a big investor in Tesla. In an analyst meeting in October, the Oracle founder criticized the way Musk was covered in the media and revealed that his second-largest personal investment was in Tesla, according to a CNBC report.
Tesla’s board said Ellison purchased 3 million shares in Tesla earlier this year. Tesla shares were up 2 percent in early trading Friday.
Wilson-Thompson, the global chief human resources officer at Walgreens Boots Alliance, previously spent 17 years at Kellogg and serves on the boards of Vulcan Materials Company and Ashland Global Holdings. “In Larry and Kathleen, we have added a preeminent entrepreneur and a human resources leader, both of whom have a passion for sustainable energy,” Tesla’s board said in a statement.
The news follows the company’s announcement in November that board member Robyn Denholm, an executive with an Australian telecommunications firm, would be named chairman. In addition to naming two new independent directors, the settlement also stripped Musk of the ability to serve as Tesla’s chair for three years and required the company to establish a new committee of independent directors and add controls over Musk’s communications.
The new directors increase the size of a board that has been criticized in the past as being too close to Musk, and brings to an end a hunt for new blood that governance advisers have suggested should include directors who have an independent streak and could serve as a coach to Musk’s behavior.
In its 2018 proxy, Tesla said only two of its directors - Musk and his brother, Kimbal – did not meet the independence standards as defined by Nasdaq. Yet Institutional Shareholder Services, the influential proxy adviser, said in a report earlier this year that it only considered five of Tesla’s then nine directors to be independent.
According to media reports, Ellison said in October that “I am very close friends to Elon Musk” and criticized journalists’ coverage of Musk, making a reference to SpaceX, one of Musk’s other companies. “He’s landing rockets on robot drone rafts in the ocean. And you’re saying he doesn’t know what he’s doing. Well, who else is landing rockets? You ever land a rocket on a robot drone? Who are you?”
A Tesla spokesperson said Ellison is independent from Musk and Tesla’s board under Nasdaq requirements and that Ellison’s investments align him with shareholders, as well as that the two have only had five in-person interactions over a number of years, all in a group setting, and do not socialize.