Risk & Compliance

Tesla Adds ‘Big Believer’ Larry Ellison to Board

Some analysts question whether the Oracle co-founder can bring independent oversight to Tesla given his friendship with Elon Musk.
Matthew HellerDecember 28, 2018
Tesla Adds ‘Big Believer’ Larry Ellison to Board

Tesla announced on Friday it added Oracle co-founder Larry Ellison to its board as an independent director, describing him as a “big believer” in its sustainable energy mission.

Ellison’s appointment follows a settlement with the U.S. Securities and Exchange Commission of allegations Tesla CEO Elon Musk made false statements in tweets about a potential buyout of the automaker.

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The agreement required Tesla to name two independent board members. Ellison — an Oracle investor and self-described close friend of Musk — will be joined on the board by Kathleen Wilson-Thompson, the chief human resources officer of Walgreens Boots Alliance.

“In conducting a widespread search over the last few months, we sought to add independent directors with skills that would complement the current board’s experience,” the Tesla board said in a blog post. “In Larry and Kathleen, we have added a preeminent entrepreneur and a human resources leader, both of whom have a passion for sustainable energy.”

Larry Ellison

The board said Ellison’s “background as an entrepreneur and philanthropist needs no introduction,” noting he “is also a big believer in Tesla’s mission, having purchased 3 million shares earlier this year.”

As The Verge reports, Tesla’s board “has been viewed by critics as weak, stacked with members who have close personal or professional ties to Musk. Shareholders have pushed the company in the past to add more outside voices.”

Analysts were divided over whether Ellison can be an independent voice given his friendship with Tesla’s controversial CEO.

“Why would you put a friend [on the board] if the idea of the two independent directors were to be objective?” Charles Elson, director of the corporate governance center at the University of Delaware, told The Verge.

But Tigress Financial Partners analyst Ivan Feinseth suggested that Ellison is another “maverick-type CEO” who would bring “a level of understanding because he has gone from a startup to a successful company similar to Tesla.”

“I don’t believe he would let friendship get in the way of good judgment,” he told Reuters.

Wilson-Thompson spent 17 years at Kellogg before joining Walgreens in 2010.

Image: Tesla