Elon Musk, Tesla

Robyn Denholm Replaces Elon Musk as Tesla’s Chairperson

robyn-denholm-replaces-elon-musk-as-teslas-chairperson

“Am considering taking Tesla private at $420. Funding secured.”

Early in August, Elon Musk tweeted plans to take Tesla private which sent the company’s stock prices soaring, making August a very good month for Tesla’s stock with the price reaching its highest value in 2018 at $379.57. The stock price went downhill following the aftermath of the same tweet as SEC (U.S. Securities and Exchange Commission) filed a lawsuit against Tesla’s CEO Elon Musk for fraud, recording the lowest stock price in September at $263.24. Many speculations were voiced about Musk leaving Tesla because of the lawsuit and that was one of the main reasons behind that 13.9 percent drop in the stock price. Yet there were even worse ramifications to that tweet apart from the stock plunges.

Elon Musk and Tesla’s Settlement with SEC

Amongst the terms of the settlement Musk and Tesla have reached with the U.S. Securities and Exchange Commission over the fraud charges was the expected yet upsetting condition that Elon Musk, while able to remain Tesla’s CEO, will have to step down as chairman of Tesla for a minimum of three years. Elon Musk has been replaced by Robyn Denholm and two new independent directors would also have to be hired. In addition, both Elon Musk and Tesla would also have to pay a fine of $20 million each. This money is going to be distributed by the means of a court-approved process among the investors who were badly affected from the tweet’s allegations.

Elon Musk’s Last Quarter as Chairman

Musk’s last quarter as chairman of Tesla has been productive, despite all the swings in the stock price. Tesla has had a great third quarter, beating Wall Street analysts’ expectations for share price, number of vehicles delivered, and the company’s quarterly earnings. Tesla has delivered 83,500 vehicles during the third quarter, compared to Wall Street’s estimate which was 80,500 vehicles. The company has produced a total of 80,142 vehicles in the third quarter: 26,903 Model S and X vehicles combined, and 53,239 Model 3 sedans. Having overcome the low production problem, Model 3 became one of the best-selling car models in the U.S in 2018.

Tesla also surprised everyone after posting their third quarter profits, with a quarterly profit of $516 million, exceeding Wall Street’s expected quarterly earnings, again. Wall Street Journal predicted a revenue of $6.33 billion, estimated based on a poll taken by financial analysts on Refinitiv, which Tesla beat recording a revenue of $6.82 billion. They also predicted a loss of 19 cents for each share which Tesla beat by a big margin, recording an increase of $2.90 per share.

Who is Musk’s Replacement?

Elon Musk’s replacement as chairperson of Tesla, Robyn Denholm, has been called a boring choice by many, while others believe she is the right choice to neutralize Musk’s nuttiness. Robyn Denholm is the Chief Finance Officer and Head of Strategy at the largest Australian telecom company Telstra and she was previously the Chief Operations Officer at the same company. She has also worked as the Chief Financial & Operations Officer of Juniper Networks and used to be Toyota Australia’s National Manager of Finance. Denholm has been a board member at Tesla since 2014 serving as Tesla’s Audit Committee Chair. And while some consider this an advantage because Robyn has been with Tesla since the company only made the Model S and knows everything about the company, others were hoping that the new chairperson would be someone from outside Tesla.

Denholm will be starting working as chairwoman of Tesla full time as soon as her six-month notice period with Telstra is over and she will be resigning from her position as Tesla’s Audit Committee Chair as well. Following the announcement of her new appointment, she has stated her excitement to help Musk in keeping Tesla profitable.

“I believe in this company, I believe in its mission, and I look forward to helping Elon, and the Tesla team achieve sustainable profitability and drive long-term shareholder value.”

Musk’s reaction

Elon Musk seems to be taking being replaced rather well, having stated that he looks forward to working with Robyn.

“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. I look forward to working even more closely with Robyn as we continue accelerating the advent of sustainable energy.”

Musk has been known to be an extreme micromanager and that has frequently been criticized about it because it wastes time. Perhaps with Denholm as chairman, Musk will have the time he needs to manage Tesla, as well as the rest of his companies, the way he wants.

 

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