As part of the terms of a settlement with the Securities and Exchange Commission, Tesla and its CEO Elon Musk agreed in September to appoint a new chairman and two new independent board members to Tesla's board. The reason: to create some independence on the Board and oversight on Musk, who can't seem to stay out of his own way.
So this morning, Tesla announced that its board had proposed the appointment of self-described "very close friend" of Elon Musk, Larry Ellison, and also Kathleen Wilson-Thompson, who is global head of human resources at Walgreens Boots Alliance and was at the company during the Theranos debacle. Shares of Tesla were higher by about 3% on the news early Friday morning.
The company's existing Board members stated : “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. In Larry and Kathleen, we have added a preeminent entrepreneur and a human resources leader, both of whom have a passion for sustainable energy.”
... And another one of Elon's pals.
It is well-known that Ellison has been a long-term investor in Tesla and a fan of Elon Musk. Back in October of this year, he disclosed that Tesla was his second largest personal investment. At the time, Ellison referred to Musk as his "very close friend":
“My second-largest investment, I will disclose it now, I am not sure people know I am very close friends to Elon Musk and I am a very big investor in Tesla. And so Tesla had a good day, and I think Tesla has a lot of upside.”
In the same call, Ellison referred to Musk as his "friend" again and defended the CEO smoking pot on the Joe Rogan podcast:
“I loved all the articles about how Elon doesn’t know what he is doing, the pictures of him smoking dope, you know, and The Wall Street Journal writing all these articles [saying] he is going to have to go out for money,” he said. “This is not just about The Wall Street Journal.”
He asked, “Why should I believe you as opposed to my friend Elon while I am out here watching this rocket land, which I think is really cool, and you are there in front of your Apple Mac typing up an article saying Elon is an idiot?”
Ellison's amusement with Musk's self-landing rockets - a technology that has been around for decades - seems to have him sold on his investment. And to say that Ellison has a penchant for "too good to be true" technology stories might be an understatement as he was also an investor in Theranos.
As usual, Twitter had some great takes on the news.
TSLA +3% on news it’s hired 2 people who had no clue Theranos was a fraud to its board— Hipster (@Hipster_Trader) December 28, 2018
Whoever is running the simulation thought the $TSLA saga wasn't outrageous enough, so they figured the Company needed some more Theranos links to make the fraud more obvious. This will make the storyline easier to follow in the book and movie when it all (un)folds $TSLAQ— Tomi (@tomi) December 28, 2018
Dear @SEC_Enforcement: @elonmusk is laughing out loud at you today, daring you to enforce the "independent" part of the new $TSLA director requirement. He brings aboard a large shareholder who has done business with the company and was, best of all, blind to the Theranos fraud. https://t.co/NJs077AehU— Polixenes (@Polixenes13) December 28, 2018
$TSLA New Board Members— Quoth the Raven (@QTRResearch) December 28, 2018
Larry Ellison: $TSLA investor who called himself a "very close friend" of Musk back in October. Was an investor in Theranos.
Kathleen Wilson-Thompson: Was at $WBA when it brought Theranos to its stores without even testing the technology.
From this point forward, Tesla will be in charge of forming a committee to oversee other portions of the SEC settlement.
These new board appointees are still pending a shareholder vote to confirm them.