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Not every CEO in charge of a publicly traded stock market giant gets to act like Elon Musk. The world's richest man may have Robyn Denholm to thank for that.
The Australian executive is not a household name, but she was appointed Tesla’s chair in November 2018.
Denholm has her own long pedigree in business. She'd already been a Tesla non-executive director for four years when she became chair and served as CFO and COO of companies like Juniper Networks and Telstra, an Australian telecoms business. In 2021, she took an additional role as an operating partner at venture capital firm Blackbird Ventures.
Her appointment as Tesla chair came after Musk was forced to step down from the role, having reached a settlement with the Securities and Exchange Commission (SEC) following his “funding secured” saga in 2018.
The Tesla chief faced an SEC investigation after he tweeted that he had secured funding to take the company private at $420 a share. But the SEC found that Musk's tweets on the subject were "false and misleading."
That saga has given Denholm years running the board of the world's most valuable automotive company — as well as full oversight of a CEO who was meant to cede some power to her. After all, the functions of a chair include ensuring responsible corporate leadership and setting high governance standards.
But her tenure as chair came in for criticism last month after a Delaware judge voided Musk's $55.8 billion pay package approved by the Tesla board in March 2018.
In the 201-page ruling, Judge Kathaleen McCormick said that Denholm's approach to the enforcement of the SEC settlement suggested a "lackadaisical approach to her oversight obligations," The New York Times reported.
Judge McCormick also noted how Musk "operates as if free of Board oversight," citing as an example his "self-regulatory process for compliance" with the SEC settlement that required him to have a "Twitter sitter" to monitor his online posts.
"Even after the settlement, the Disclosure Committee did not review his tweets. At trial, Denholm was not sure whether the Disclosure Committee was fulfilling its obligations under the SEC Settlement," McCormick's opinion noted.
She also noted Denholm's involvement in the run-up to the decision on Musk's compensation plan being agreed.
Tesla did not respond to a request for comment from BI.
Since Denholm became chair, Tesla's value has skyrocketed and peaked in early 2022 at just over $1.2 trillion. It's now valued at $600 billion — although that's still 12 times Ford's market cap. In that time, Musk has become more freewheeling in the way he operates too, raising questions about the checks and balances on his power.
McCormick also drew attention to how Musk changed his title to "Technoking of Tesla" in March 2021. Her opinion recalled Musk's testimony during his deposition that “he did not consult with the Board about this new title, but that it was communicated to at least Denholm” beforehand.
As ridiculous as it seems to have a title like “Technoking” officially filed in an 8-K report to investors, it passed through on Denholm’s watch.
Antonio Masiello via Getty Images
Whether other Musk fancies also pass through will be watched closely. The Tesla CEO took to X last month to say he was “uncomfortable growing Tesla to be a leader” in AI and robotics without having at least 25% voting control.
In his words, it would give him “enough to be influential,” but not enough to mean he can’t be overturned. Musk is also seeking to reincorporate Tesla in Texas from Delaware following the court decision in the state on his pay package.
Denholm, who has made a “life-changing” $280 million following sales of Tesla options in 2021 and 2022, will be closely involved in the decisions here.
If those decisions go Musk's way despite loud protests from outside the company, it would be a sign of who has effective power within it.
