Thursday witnessed a robust denial by Tesla’s chairperson, Robyn Denholm, against a claim published in The Wall Street Journal. The financial daily had insinuated that Tesla’s board was secretly approaching executive headhunters in their quest for a fresh CEO to replace the indomitable Elon Musk. Denholm stated the report was ‘completely untrue’ and reassured that the EV manufacturing company’s governance had ‘utmost confidence’ in Elon Musk’s capacity to ‘carry forward the ambitious growth trajectory plotted’. Musk himself dismissed the report as a ‘calculatedly erroneous news piece’.
A week prior to the controversy, Musk had announced his intention to lessen his external obligations to focus more on Tesla’s management. Amid concerns surrounding his work with the Department of Government Efficiency (DOGE) and frequent absences causing investor unease, this decision came as a ray of hope. However, the dwindling sales of Tesla’s older EV fleet was a persistent worry. Musk’s political leanings had triggered opposition to both the CEO and Tesla, with instances of property damage at Tesla stores and charge stations across the United States and Europe.
The narrative turned, as the board members requested Musk to publicly confirm his commitment to devote more time to Tesla’s operations. It was left ambiguous whether Musk, who is also a part of the board, was in the loop about the possible succession plans. Importantly, it wasn’t clear if his affirmation to invest more time in the company had any impact on these tentative plans.
Caught in the whirlwind of increasing global competition, Musk’s vision had shifted from his earlier pledge of developing a new low-cost EV model. His focus is now on the launch of autonomous taxis and human-like robots, thereby painting Tesla as an artificial intelligence and robotics entity rather than a conventional automobile manufacturer. A considerable chunk of Tesla’s market value is influenced by this visionary shift.
Certain members of Tesla’s board, JB Straubel, the co-founder included, have been continually reassuring investors of the company’s stability. Activist investors, however, have been vocal about their belief in the board’s seeming lack of autonomy and their alleged failure to effectively manage Musk.
Denholm, who was chosen by Musk and had formerly defended his contentious pay structure, has also come under fire for her own remuneration policy. Detractors questioned whether this particular issue had any impact on her ability to properly supervise Tesla’s operations and Musk. Nonetheless, in the face of these allegations, Denholm stood strong, dismissing the allegations. A spokesperson further said that her earning was justifiable.
Financial activities of Denholm also came under scrutiny when she offloaded approximately $33.7 million worth of Tesla’s shares in March. This further fuelled the speculative atmosphere already present.
The Tesla board, comprising of eight members including Elon Musk’s sibling, Kimbal Musk, and James Murdoch, son of media tycoon Rupert Murdoch, are reportedly working on procuring an independent director. The complete transparency of these developments has been left ambiguous, and adds another layer to Tesla’s evolving executive landscape.