Tesla Inc. added Larry Ellison and Kathleen Wilson-Thompson to its board, picking a controversial Silicon Valley luminary and a respected human-resources expert to show securities regulators that it’s giving Elon Musk more oversight.
Ellison, the co-founder of Oracle Corp., and Wilson-Thompson, the global chief human resources officer of Walgreens Boots Alliance Inc., join a board the Securities and Exchange Commission ordered to step up its oversight after Musk claimed in August to have had the funding and investor support for a buyout. The chief executive officer relinquished the role of chairman in November, and both he and the company agreed to pay $20 million penalties.
In Ellison, Musk has added another larger-than-life technology titan lauded for his business accomplishments but not without his own corporate-governance controversies. The 74-year-old billionaire came under attack from Oracle shareholders for excessive pay packages while running the company. Ellison also publicly defended Musk after his tweets about taking Tesla private landed him in hot water with the SEC, a point that raised eyebrows with corporate-governance experts.
“His vocal support for Musk doesn’t suggest the kind of objectivity coming in that I think people had hoped for,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “The SEC’s point was to to bring in two people who were neither supporters nor vocal opponents of Tesla.”
Street Cheers
Wall Street analysts and investors cheered the news, with Tesla shares rising as much as 3.5 percent to $327.18 Friday in New York. The stock was up 1.5 percent this year through the close Thursday.
Wedbush Securities’ Daniel Ives called the choice of Ellison “a home run” and said he could “help channel Musk’s energy and passion into positives” and steer him away from the cloud created by his “going private tweetstorm,” according to research note published Friday.
Tesla also said it is setting up a committee on the board to oversee compliance with the SEC agreement regarding public disclosures and public statements and review potential conflicts of interest, employment and compensation disputes, according to a regulatory filing Friday.
The new additions to the board put a bookend on a months-long distraction that at one point looked like it might cost Musk his future with the company. While reining him in may prove challenging, they’ll help steer a carmaker that’s made significant strides in profitably making and delivering electric vehicles.
Ellison went off-script during an Oracle meeting with analysts in October to announce that he had been building a personal stake in Tesla and that it was his second-largest holding. He criticized how the media had covered Musk, 47, whom he called a close friend.