(Reuters) – Tesla-Inc on Friday named two independent directors, including Oracle Corp. co-founder Larry Ellison, to meet a September deal that resolved federal charges that arise from the company’s Chief Executive Elon Musk’s tweet about taking the electric car manufacturer private.
FILE PHOTO: Tesla Model 3 car is displayed during a media preview at the Auto China 2018 motor show in Beijing, China, April 25, 2018. REUTERS/Jason Lee/File Photo
Tesla said Ellison and Walgreens Boots Alliance global head of human resources Kathleen Wilson-Thompson, a member of the board of directors, effective Dec. 27. (a little bit.ly/2SqAbJm)
Ellison, who calls himself a close friend of Musk, bought 3 million shares of Tesla earlier this year.
On the basis of an agreement with the U.S. Securities and Exchange Commission, Musk agreed to pay $20 million fine and a step to the side as Tesla’s chairman for three years to offset costs that would have been forced to leave. Tesla also agreed to pay $20 million fine.
Tesla has also agreed to the appointment of an independent chairman, two independent directors and a board of directors to control Musk communication. Twitter is often the Musk is the go-to location for freewheeling communication and confrontation with Tesla’s critics.
A U.S. judge in October approved the deal, which was the result of tweets by Musk on Aug. 7 that he was considering the company a private and had secured financing. The SEC then filed fraud against him, citing what he said were “false and misleading” tweets.
Tesla’s shares increased by 1.8 per cent to $321 Friday in the morning trade.
Analysts welcomed the additions, especially Ellison, whose background is similar to Musk. Ellison, through a spokeswoman, declined to comment.
“Larry Ellison has a huge presence in Silicon Valley … with a maverick type of CEO characteristics very similar to Elon Musk, so he brings a level of understanding, for he is gone from the startup of a successful company similar to Tesla,” Tigress Financial ners analyst Ivan Feinseth said in an e-mail.
“I don’t think that he would let friendship get in the way of common sense,” Feinseth added about Ellison.
Wedbush analyst Daniel Ives called the appointments a “home run” in a research note.
The addition of Ellison to the board of directors to help channel Musk energy and passion in positive going forward, therefore, further away from the ‘going private tweetstorm’ of a few months ago, still a lingering overhang on the name,” Ives said.
In November, Tesla was named director Robyn Denholm as chairman of the board, and one of the requirements. Denholm, who joined Tesla as an independent director in 2014, and agreed to step down as finance chief of the Australian telecom company Telstra Corp Ltd, spent 11 years as a senior vice president at Sun Microsystems, a unit of Oracle.
Tesla said that the investigation is “thorough, comprehensive” search process for the board, calling Ellison a “leading entrepreneur” and Wilson-Thompson “human resources leader” and said both had a passion for renewable energy.
The larger-than-life Ellison is also known for making arrogant, cheeky comments from the public. He went on a tirade of attacks of cloud computing in a 2008 analyst conference, which only served to highlight Oracle’s slowly moving in the space. He undermined Oracle’s business relationship with Hewlett Packard in 2010 in an e-mail to the New York Times that chastised the council for the firing of the CEO and his friend, Mark Hurd, following a sexual harassment investigation.
He rarely interact with journalists or blogs, and has only Tweeted once 2012 message promoting Oracle’s cloud products.
Ellison, according to Forbes magazine, worth $55 billion, has in the past defended Musk.
“I’m very good friends with Elon Musk, and I am a big investor in Tesla,” Ellison, 74, said on Oct. 26 conference call with analysts.
“This man is the landing rockets,” Ellison added about Musk, referring to his leadership of SpaceX. “He is the landing rockets on robot drone rafts in the ocean, and you say that he does not know what he is doing. Well, who is the landing of a rocket?”
Wilson-Thompson, who could not immediately be reached for comment, spent 17 years at Kellogg Co. prior to joining Walgreens, and serves on the boards of two U.S. manufacturing companies.
Oracle’s Executive Chairman of the Board of directors and Chief Technology Officer Larry Ellison speaks during his keynote address at Oracle OpenWorld in San Francisco, California, September 30, 2014. REUTERS/Robert Galbraith
Musk has gained fans for its bold approach of business and technology, with the help of his nearly 24 million followers on Twitter to promote Tesla, SpaceX and tunnel venture Boring Co.
But the August claiming that he was financing Tesla private, and then a U-turn, stunned Wall Street and Wall Street came as Musk was filmed in the briefly smoking marijuana during a live show and when he was a British diver in the Thai cave rescue of a “pedo.”
Tesla’s market cap is higher than that of the traditional, established AMERICAN car manufacturers millions of vehicles and billions of dollars in profit annually, and the company has garnered legions of fans, who, despite repeated production problems.
Additional reporting by JimFinkle; Editing by Sriraj Kalluvila and Steve Orlofsky