Elon Musk’s renewed feud with the Securities in addition to Exchange Commission after another errant tweet raises concern over the Tesla board’s ability to control the electric car maker’s strong-willed in addition to unpredictable CEO.
“His board has to act,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “They seem to be incapable of acting, which is usually very disappointing.”
The board’s independence in addition to ability to restrain Musk have been frequently called into question. Several board members have close ties to Musk either through family or business. Board members include his brother Kimbal Musk, a restaurateur in addition to Tesla investor, in addition to Antonio Gracias, a long-time investor who also sits on the boards of Musk’s companies Solar City in addition to SpaceX.
Tesla declined to comment just for which article.
The SEC accused Musk on Monday of violating his Sept. 29 agreement with the agency, which settled securities fraud charges for allegedly misleading investors that has a series of inaccurate tweets last summer saying he had secured the funds necessary to take Tesla private at $420 a share. Musk agreed to pay fine of $20 million, step down as chairman for three years in addition to refrain through tweeting material information about the company’s operations in addition to finances without company review in addition to approval. Tesla also had to pay $20 million.
Tweets on Feb. 19 have Musk within the SEC’s crosshair again in addition to pushing for contempt charges. He has until March 11 to explain to a federal judge in fresh York why he shouldn’t be held in contempt after tweeting production numbers for 2019 which were inaccurate in addition to which Musk corrected later which day. The SEC said Musk sent the tweets without submitting them for review or getting company approval.
Under the deal, Tesla was also required to add two independent directors to the board.
Software mogul Larry Ellison, chairman in addition to chief technology officer of Oracle, in addition to Kathleen Wilson-Thompson, global chief human resources officer of pharmacy chain Walgreens Boots Alliance, joined the board in December.
which also promoted Australia telecom executive Robyn Denholm, who joined Tesla’s board in 2014, to the replace Musk as chair in early November.
nevertheless which is usually unclear how much power she actually has over Musk, Kelley Blue Book editor Matt DeLorenzo said Tuesday on SouthIndianNews.com’s “Power Lunch.”
“There was which agreement to bring in Robyn Denholm as the chairman, in addition to the real question here is usually: is usually which window dressing? I mean the question is usually, “Who is usually sort of Elon’s boss in addition to how is usually which issue going to be addressed?'” DeLorenzo said.
After the SEC’s filed its most recent complaint, Musk took to twitter again to criticize the agency, saying “Something is usually broken with SEC oversight.”
Even with the fresh additions, Musk seems to control the board, including who is usually appointed in addition to removed, Elson said. Any attempt to rein him in results potentially in their replacement.
“in addition to they value, I guess, being on the board more than acting as normal board members would certainly in such a situation,” Elson said. “In most companies, they would certainly be gone.”
In its complaint, the SEC cited an interview Musk gave with CBS’ “60 Minutes” in December when he said the company doesn’t need to review his tweets.
Asked how the company would certainly know if he is usually planning to send a potentially stock-moving tweet without being able to read which, Musk told the news show, “Well, I guess we might make mistakes. Who knows?”
Turnover in Tesla’s executive ranks have also raised red flags, especially the sudden departure of former General Counsel Dane Butswinkas, who left after just two months on the job. Tesla has lost more than 40 executives since 2016.
“which should be a signal of something,” Elson said.
Former SEC Chairman Harvey Pitt told SouthIndianNews.com which Musk should be held in contempt for his comments. Although Pitt said he does not know why Butswinkas left, he thinks many recently departed executives may feel Musk doesn’t listen to them.
“For somebody who’s a high-powered, very capable lawyer as he was in addition to is usually, which has to be incredibly frustrating,”
Pitt said Tuesday on “Squawk Box.” “I think the same problem exists in a lot of areas, in addition to unless the board steps up its oversight, we will continue to see which huge amount of turnover.”