Tesla’s Chairwoman of the Board, Robyn Denholm, has denied that a report claiming the board has searched for a new CEO to replace Elon Musk, the only positive move it would have made in years.
Musk also commented on the report.
Yesterday, we shared a Wall Street Journal report that claimed Tesla’s board had considered hiring an executive search firm to potentially replace Musk as CEO, among other things, including pressuring Musk to spend more time at Tesla.
We noted that if the report is accurate, it would be the first time the board has stood up to Musk after years of letting him do as he pleases at Tesla, despite being a minority shareholder.
They have backed his every move, granted him a $55 billion CEO compensation package, and remained silent when he threatened Tesla shareholders that he would not develop AI products at Tesla unless given a larger, more controlling share of the company, or decided to fire Tesla’s entire charging team to make an example out of the head of the team.
Tesla’s then-third-largest individual shareholder, after Musk, Leo KoGuan, told Electrek last year that he couldn’t get his concerns about Musk heard by the board.
Most recently, they have not addressed the protests at Tesla stores and product boycotts, which are attributed to Musk’s involvement in politics, angering a significant portion of the population and Tesla’s consumer base.
As a result, Tesla’s sales are crashing, but the board never ever hinted at considering blaming the company’s top management until the WSJ report.
Now, Tesla issued a statement signed by Chairwoman Robyn Denholm denying the report:
Earlier today, there was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company. This is absolutely false (and this was communicated to the media before the report was published). The CEO of Tesla is Elon Musk and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead.
Musk shared the statement and added this comment:
It is an EXTREMELY BAD BREACH OF ETHICS that the Wall Street Journal would publish a DELIBERATELY FALSE ARTICLE and fail to include an unequivocal denial beforehand by the Tesla board of directors!
It’s fair to mention that Tesla, and Musk in particular, have been known to deny reports that turned out to be true.
The WSJ claimed to have reached out to both Musk and Tesla before publishing, and that neither responded.
Electrek’s Take
It’s pretty hilarious that, finally, the board is reported to be doing the right thing, and it rushes to deny it. It’s literally the board’s job to plan for the CEO succession. Musk is splitting his time between 6 different major projects and Tesla deserves a committed CEO.
But: “hey! Woah, no, we are not searching for a new CEO because that would mean we are not Musk’s personal puppets.”
While I did note to take the WSJ report with a grain of salt as the unnamed sources did appear to come from an executive search firm that wasn’t selected, and some Tesla investors, I tend to believe them more than Tesla and Musk here.
They did say that they reached out to both, which they are now denying. This is standard practice and would be surprising if it didn’t happen. What would be less surprising is for Tesla and Musk not to answer since they don’t have a press department.
I wouldn’t be surprised if the board started floating the idea of potentially replacing Musk as leverage against him to commit more time to Tesla.
But the entire thing is ridiculous. Trying to get Musk to spend more time at Tesla is counterintuitive to saving the company.
Let’s be honest, any CEO from any other automaker that finds itself in the situation that I am about to describe would have been fired a long time ago:
- Launched a single new vehicle in 5 years, and it’s a commercial flop
- Rapidly declining sales
- Rapidly declining gross margins
- Massive protests and boycotts of your product due to its CEO’s senseless involvement in politics
- CEO promising full self-driving hardware on millions of vehicles and only admitting 6 years later to be wrong – needing all those vehicles to be retrofitted.
Any one of those is a fireable offense, and yet, Musk is stacking them up while the board cashes hundreds of millions in stock options.
FTC: We use income earning auto affiliate links. More.
