Photo Credit: Shutterstock.com
Elon Musk has to be replaced as Tesla's board chair by November 13 as part of an SEC settlement for Musk's "funding secured" tweet. (Timeline of that saga is here.)
The job description for the open chairman post includes protecting the value of this wildly successful story stock, succession planning for senior staff, and responding to subpoenas from the Securities and Exchange Commission. A new chairman could conceivably rein in Musk or adjust Musk's role at the world's most drama-filled electric vehicle maker.
Musk, by the way, the firm's largest shareholder, stays on as CEO and keeps a board seat.
So, who wants this job?
Last week, The New York Times and The Financial Times reported rumors that Tesla non-executive director and Murdoch-media empire-scion James Murdoch was the lead candidate for the chairman role. Sources for those rumors were likely Murdoch himself, according to The Verge. In other words, Murdoch wants the job.
Musk responded by tweet to the FT article with a terse, “This is incorrect.”
So, Murdoch wants the job and Musk doesn't want him to have it. That's going to make for some awkward moments at the caviar bar at the next board meeting.
Meet the old board
The next chairman could come from the existing board, although only Robyn Denholm, Linda Johnson Rice and James Murdoch appear eligible for an "independent" role. Here are the members of Tesla's board.
Brad Buss: Former CFO at Musk family firm SolarCity.
Antonio Gracias: Reputed to be Musk's preference, Gracias is a dubiously independent director with early investments in Tesla as well as Musk's rocket company, SpaceX.
Ira Ehrenpreis: Venture capital investor who put money into Tesla while at Technology Partners.
Kimball Musk: Restaurateur and sibling of Elon Musk.
Steve Jurvetson: The investor and technologist is on extended leave from the board after an alleged sexual misconduct episode at the venture firm bearing his name. He's been busy raising a big, new fund.
Robyn Denholm: COO of telecommunications firm Telstra. Prior to Telstra, Denholm was CFO and COO at Juniper Networks. Unique among board members, she actually worked in the automotive business — at Toyota Motor Corporation Australia.
Linda Johnson Rice: Chairman of Chicago-based Johnson Publishing Company, Rice joined the board in 2017.
James Murdoch: Rupert Murdoch's son launched record label Rawkus Records (roster included Black Star). At 30, he served as CEO of BSkyB. Murdoch became CEO of Twenty-First Century Fox in 2015.
Two independent directors will be added to the board as part of the SEC's settlement with the EV pioneer.
Replacing Elon Musk?
As part of its settlement, the SEC wants a new and independent chairman, more independent directors, and a Hannibal Lecter mask secured snugly over Musk's Twitter mouth. The independent chairman will be confronting delivery "hell," production "hell," reliability challenges, labor disputes, staff retention issues, libel suits from cave divers, shareholder suits, possible DOJ inquiries, recreational drug use, rapper incidents and a $40 million securities fraud settlement.
The new chairman will preside over a relatively passive board, heavy with Musk allies, with only an approximate understanding of the term "independent director." Experience with automotive manufacturing at global scale would be an enormous plus for the new boss.
Antony Currie, writing at Reuters, lists experienced outsiders such as former Ford Motor chief Alan Mulally, former Boeing CEO Jim McNerney or White House alum Gary Cohn as "a better option than Murdoch."
Other names tossed around in trade press and comment boards include Fidelity Investments CEO Abigail Johnson, Starbucks founder Howard Schultz and former Vice President Al Gore (who has officially declined the non-offer).
How about Gywnne Shotwell (COO at SpaceX), Meg Whitman, Mark Cuban, Reed Hastings, John Chambers or Eric Schmidt? Or a more TMZ type choice such as Barack Obama, Ivanka Trump, Elon's mom or Oprah Winfrey? Less sanguine commenters have suggested more ethically flexible choices such as Elizabeth Holmes, Lyndon Rive, Bernie Madoff, Charles Ponzi, Jeff Skilling and Andy Fastow.
November is a big month for Tesla, with $230 million from a SolarCity convertible note due on Nov. 1, a third-quarter earnings release on about Nov. 7, and a replacement chairman decision due on Nov. 13 (although Musk can request an extension for that).
Can Musk outmaneuver Murdoch? Will the new chairman come from the existing board or outside the company? Will the new directors truly be independent? Will the board be able to stand up to Musk and recover from its recent setbacks?
The boardroom drama at Tesla is far from over.
Who do you think would be the right choice to replace Elon Musk as Chairman at Tesla? Feel free to weigh in in the comments section or on Twitter at #NextTeslaChair.