Tesla has added billionaire Larry Ellison to its board of directors to supervise Elon Musk — despite the fact that Ellison has called himself a “very close friend” of the bad-boy tech tycoon.
Ellison, co-founder of software giant Oracle, joined Tesla’s board on Friday as part of a settlement with the Securities and Exchange Commission over the Tesla chief executive’s misleading Aug. 7 tweet about talks to take the electric-car maker private.
Musk has likewise given up the chairman role at Tesla, and on Friday the company also named to its board Kathleen Wilson-Thompson, the global head of human resources at drugstore giant Walgreens Boots Alliance.
Nevertheless, corporate-governance experts pounced on the fact that Ellison, who through a spokeswoman declined to comment, had gotten on a soapbox just two months ago to defend Musk against critics as he disclosed a 3-million-share Tesla stake.
“I’m very close friends with Elon Musk, and I’m a big investor in Tesla,” Ellison said on a Oct. 26 conference call with analysts.
“This guy is landing rockets,” Ellison added about Musk, referring to his leadership of SpaceX. “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 a rocket?”
Tesla said it conducted a “thorough, expansive” search process for the directors, calling Ellison a “preeminent entrepreneur” and Wilson-Thompson “a human resources leader” and said both had a passion for sustainable energy.
But Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, called Ellison’s appointment “disappointing,” adding that Tesla investors would have benefitted from someone “independent and objective.”
“This is not, I would imagine, what the SEC expected, and I would imagine it’s not what the other investors wanted or expected,” Elson said. “I think Elon probably had a significant part in the process.”
Ellison, the 10th-richest person in the world with a net worth of nearly $50 billion, is known for throwing lavish parties on private islands.
Tesla shares on Friday rose 5.6 percent to $333.87.
Under an agreement with the Securities and Exchange Commission, Musk agreed to pay a $20 million fine and step aside as Tesla’s chairman for three years to settle charges that could have forced his exit. Tesla also agreed to pay a $20 million fine.
