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Tuesday 20th March 2018

Tesla Names New Chair to Replace Musk

Business

7Dnews London

Thu, 08 Nov 2018 15:56 GMT

Tesla's board has named one of its current members as chairman to replace Elon Musk, complying with terms of a fraud settlement with US securities regulators.

On Thursday November 8th, the electric car and solar panel company's board named Australian telecommunications executive Robyn Denholm as chairman, with immediate effect. 

Denholm will leave her post as CFO and strategy head at Telstra, Australia's largest telecommunications company, after a six-month notice period. She will then work full-time at Tesla, where she has served on the board since 2014. 

According to AP, Musk will remain as Tesla's chief executive as part of the settlement deal with the US Securities and Exchange Commission. The US agency filed a lawsuit alleging that Musk misled investors in August with fallacious statements on Twitter about securing the funding to take Tesla private. 

The move promotes Denholm, 55, from relative obscurity into a high-profile position where she will try to rein in Musk and manage a company that is struggling to produce vehicles and turn a profit in its attempts to shift the world from oil-fuelled transportation to battery-powered 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," Denholm said in a statement. 

A corporate governance expert has questioned whether 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 Musk. 

"She was there while all of this was going on," said Charles Elson, director of the corporate governance centre at the University of Delaware, referring to Musk’s various misdemeanours, including smoking what looked like marijuana during a YouTube interview. "Do you ask the person who helped get you lost in the woods to help drive you out of the woods?" 

Denholm has auto sector and Silicon Valley experience. She was chief financial and operations officer at Juniper Networks for nine years, and worked at Sun Microsystems. She also has held financial management posts at Toyota Motor Corp. in Australia. Telstra is the largest telecommunications company in Australia. 

Tesla earned a $311.5 million net profit during the third-quarter, delivering the first step of a promise from Musk to post sustainable profits. It was only the third time that Tesla has posted a quarterly profit in its eight-year history as a public company and the first time in two years. Telsa has never reported an annual profit. 

A big jump in Tesla's output of its mass-market Model 3 car powered the breakthrough. The production increase and moneymaking quarter are two things that Musk promised would happen. 

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


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