Tesla Board in Spotlight After Cashing In $1.2 Billion With Musk
(Bloomberg) — Almost like clockwork since mid-November, Tesla Inc. board chair Robyn Denholm has been selling the company’s stock. During that time, shares whipsawed and the company’s sales slowed — and then cratered — around the world.
As part of a pre-arranged plan around exercising equity options, Denholm cashed in 112,390 shares worth $35 million on Nov. 15, weeks after a post-presidential election pop. Then the same amount of stock on Dec. 2. Then again on Feb. 3, March 3 and, most recently, on Tuesday.
All told, Denholm has sold $558 million worth of stock since 2020, according to data compiled by Bloomberg, building a fortune she’s described as “life-changing.” That’s almost half the $1.2 billion worth of shares sold by Tesla’s current directors in that span, nearly all of which came from exercising options.
That massive sum is emblematic of the riches created by Tesla over the past several years under Elon Musk’s tenure as chief executive officer. While much of that has accrued to Musk, the world’s wealthiest person with a $332.7 billion fortune, the carmaker’s volatile rise also benefited its board, which is partly populated by his friends and family.
Yet, even by Musk’s own telling, the world’s most valuable automaker is at a crossroads. Tesla stock is down 41% from its highs in December, with his emergence as a top donor and adviser to US President Donald Trump rendering its vehicles, stores and charging stations targets for the administration’s detractors at home and abroad.
Where Tesla goes from here will depend on Denholm and the rest of its low-profile board, which faces questions from some investors over Musk’s focus and future with the company. Members recently reached out to several executive-search firms to work on a process for finding the carmaker’s next CEO, the Wall Street Journal reported. Denholm denied this, saying the board is “highly confident in his ability to continue executing.”
Musk, Denholm and representatives of Tesla didn’t respond to requests for comment.
‘Couldn’t Find Anyone’
With Musk’s time in the US government potentially winding down as soon as this month, Tesla’s board — collectively still holding about $1.63 billion worth of shares and options — will be under new pressure to chart the best path forward with Musk.
They have in the past contemplated existence without Musk as CEO. Rather, he could be the company’s chief product officer, with the board finding a CEO who would run other parts of the business, including sales, finance and human resources. Former director Antonio Gracias — another volunteer at Musk’s Department of Government Efficiency — testified during the Delaware pay case that Tesla lost early last year that this was once considered.
“We did think about that, but we couldn’t find anyone,” Gracias said. He left Tesla’s board in 2021.
The current members of the board have drawn criticism for years over their close ties to Musk, including from the judge who last year rejected Musk’s $55 billion compensation package.
Denholm, a former executive at Telstra Corp. and Juniper Networks Inc., joined Tesla’s board in 2014. She took over as chair four years later as part of settlements with the US Securities and Exchange Commission of charges related to Musk’s short-lived attempt to take the carmaker private.
Other current members of the board include Ira Ehrenpreis, a venture capitalist who’s invested in several of Musk’s other companies; Joe Gebbia, the Airbnb Inc. co-founder working alongside Musk at DOGE; Tesla co-founder JB Straubel; and Musk’s brother, Kimbal.
While the company refuted that it was exploring a CEO change, the report affirms the board’s oversight role and serves as a “warning shot” to Musk, Wedbush Securities analyst Dan Ives said on Bloomberg Television.
“The board had to do something,” he said. “This was the moment of truth.”
—With assistance from Dana Hull.