Following a settlement with the Securities and Exchange Commision in September, Tesla announced on Wednesday that Australian telecom executive Robyn Denholm will replace Elon Musk as chairwoman of the board, effective immediately. Musk will remain CEO of the automaking upstart but was forced to step down as chairman for a period of three years.
Musk’s removal came as a result of a tweet suggesting that he might take Tesla private at $420 a share. The tweet consequently resulted in SEC penalties, including his removal from the board and $40 million in fines.
Denholm, who joined the Tesla board of directors in 2014, is currently the CFO and Head of Strategy at Australia’s largest telecom company, Telstra Corp. Ltd. She will be stepping down from Telstra following a six-month period of transition.
Despite Denholm’s financial background and auto industry expertise (her resume also includes a stint as the national finance manager at Toyota Motor Corp.’s operations in Australia), some experts believe that Tesla would have been better served by promoting an outsider to help corral the notoriously mercurial Musk. In addition to his costly tweet, Musk recently guested on the popular Joe Rogan Experience podcast, where he appeared to smoke marijuana.
“With all the crazy stuff going on, [Denholm] was there,” Rohan Williamson, a corporate governance expert at Georgetown University’s McDonough School of Business, told the AP. “She couldn’t control him before. Is anything going to change?”
Cruising toward profitability
Despite Musk’s erratic behavior, Tesla may finally be on the road to profitability. According to third quarter numbers, Tesla outsold Mercedes-Benz in the U.S. for the first time. The company is also starting to solve some of its production issues; Tesla delivered twice as many of its signature Model 3 cars in the third quarter of 2018 than it had in all previous quarters combined.
All this news has sent Tesla’s stock soaring: From Oct. 8 to Nov. 8, the company’s shares rose over 100 points to 351.40. Although Tesla is still saddled with $10 billion in debt, the company posted $311.5 million in third quarter profit and experts at Macquarie Research believe the company could turn an annual profit as soon as this year.
For his part, Musk seems pleased with the new choice for chairwoman.
“Robyn has extensive experience in both the tech and auto industries, and she has made significant contributions as a Tesla Board member over the past four years in helping us become a profitable company,” Musk said in a statement announcing her new role. “I look forward to working even more closely with Robyn as we continue accelerating the advent of sustainable energy.”
As part of its SEC settlement, Tesla must also appoint two new independent directors. Tesla is also required to review Musk’s comments about the company on Twitter.
Given Elon’s social media history, there is little concern they won’t comply with that order.