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Tesla names director Denholm to replace Musk as board chair

Reuters 

By and Michelle Price

(Reuters) - Inc has named as board chair, fulfilling a demand by the to strip the job from Elon Musk, the electric car maker's wayward who has dragged the company through months of turbulence.

The appointment was required as part of a September deal struck with the securities regulator to settle fraud charges against Musk and Legal experts said it was unclear if Denholm, who has been on Tesla's board for four years, was independent enough for Tesla to comply with the court-approved settlement.

Denholm, 55, joined an in 2014 and is the head of its audit committee. She was paid almost $5 million, mainly in stock options, by the company last year, making her the highest remunerated of its board members.

She is chief at Australian telecoms firm and previously worked for in Australia, according to her profile. She will resign from Telstra to take the Tesla role full-time.

Whether she is independent enough to rein in public outbursts by Musk - who mocked the SEC as the "Shortseller Enrichment Commission" on after the fraud charge settlement - is an open question.

Denholm sat on the board when Musk set production targets for the Model 3 car that were not met, and also when the tweeted that he had secured funding to take Tesla private, which prompted the SEC to file fraud charges against him.

The court-approved settlement of those charges requires Tesla to certify in writing that it has appointed an "independent" and to provide evidence and exhibits to make its case.

While the definition of "independent" is typically broad, legal experts suggested the court could ultimately conclude Tesla was not in compliance with the letter of the settlement.

"It does violate the spirit of the settlement, which was to change the culture of the board so there was a check on Musk's worst instincts," said Stephen Diamond, a at

The SEC declined to comment beyond the court judgment.

Musk, who remains Tesla's biggest shareholder and the driving force behind its ambitious plans to reshape and car transport, tweeted https://com/elonmusk/status/1060452014642016256 his approval of the appointment.

"Musk, I believe, has a ton to do with the selection and he wants to be sure that they can see eye-to-eye," said

Top proxy advisers and Glass, had each classified Denholm as an "independent" of Tesla in reports to the carmaker's investors earlier this year.

HUMBLE BEGINNINGS

Denholm pumped petrol at her parents' filling station before going on to study at and joining accounting firm

Since then, she has worked at maker , network gear firm and computing firm She has also been for

Telstra said when he appointed her: "Robyn has a proven track record as a focused on "

Patricia Lenkov, however, said that Denholm likely was not the right pick for the job, arguing Tesla needed a figure with more experience dealing with strong founders.

"There might be an element of risk here. She's not a proven entity in this kind of work," she said.

While Tesla is finally starting to make good on Musk's promises on production of the Model 3 sedan, seen as crucial to the company's future, it has lost senior executives for sales, human resources, and in recent months.

Its for was reported last month to have left.

"We view the fact that Denholm has prior industry experience with positively," said Garrett Nelson, adding it made sense that Tesla should seek to avoid the risk of a genuine outsider clashing with Musk.

The Silicon Valley billionaire's gift for self-promotion has made Tesla one of the world's most talked-about businesses but also caused public spats with journalists, analysts, Wall Street investors and even

He is being sued for calling one of the divers behind this year's Thai cave rescue a "pedo".

According to The Australian newspaper, Denholm said the only things that really disappoint her are rudeness and waste.

"Politeness costs you absolutely nothing. It doesn't matter whether you are the most senior person in the room, or the most junior," she told the paper in an interview a few years ago.

Tesla shares closed up about 1 percent at $351.40.

(Additional reporting by and in Bengaluru, Melanie Burton in Melbourne, and Jan Wolfe in Washington, and Ross Kerber in Boston; Editing by and Bill Rigby)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 09 2018. 03:54 IST
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