Tesla Appoints New Board Chair and Directors Pursuant to Elon Musk Settlement

On September 29, 2018, the SEC announced that Elon Musk, CEO of Tesla Inc., had agreed to settle securities fraud charges relating to specific claims made in a tweet Musk sent on August 7, 2018 stating that he could take Tesla private at $420 a share. The SEC’s complaint alleged that Musk knew the transaction was uncertain and that he had not discussed deal terms with any potential financing partners. The complaint further alleged that the tweets caused Tesla’s stock price to jump over six percent on August 7, 2018. Among other relief, the settlement required: Musk to step down as Chairman and be replaced by an independent Chairman; Tesla to appoint two new independent directors; Tesla to establish a new committee of independent directors; and Musk and Tesla to each pay a separate $20 million penalty. Tesla announced on November 7, 2018 that it was appointing Telstra CFO, Robyn Denholm, as Chair of the Board. Further, on December 28, 2018, Tesla appointed Oracle co-founder, Larry Ellison, and Walgreens Boots Alliance executive vice president, Kathleen Wilson-Thompson, as independent directors.