Elon Musk, the CEO and face of Tesla, is constantly making headlines and airing his opinions about X, which he owns. But the electric car manufacturer has another leader, who we don’t see much.
Since 2018, Tesla’s board of directors has been led by Robyn Denholm, a tech executive who rarely speaks publicly outside her native Australia, and who publishes almost nothing on X.
For some analysts and investors, Mme Denholm is “the adult in the room” who helped Mr. Musk grow Tesla’s market capitalization. But for her detractors, she failed in her most important task: controlling Elon Musk.
“Laid-back approach”
On January 30, a Delaware judge strongly criticized Mr.me Denholm while canceling Mr. Musk’s compensation plan adopted in 2018, which exceeded $50 billion. Mme Denholm took a “lackadaisical approach to his supervisory duties” at Tesla, Judge Kathaleen McCormick wrote.
PHOTO AMIR HAMJA, THE NEW YORK TIMES
In a ruling, a judge says Elon Musk acts as if he is unaccountable to Tesla’s board of directors and criticizes the nonchalant approach of board chairwoman Robyn Denholm.
The judge also questioned the independence of Mme Denholm faced Mr. Musk, emphasizing that his position earned him a salary of 280 million. In 2023, Mme Denholm said in court that the pay “changed his life.” His compensation far exceeds that of his peers, such as the chairmen of the boards of Apple and Alphabet, Google’s parent company.
Musk acts as if he is unaccountable to the board.
Judge Kathaleen McCormick, in a Delaware court ruling
Mr. Musk protested this judgment: he intends to ask shareholders to authorize Tesla to transfer its incorporation to Texas, where Tesla’s headquarters are located. The Delaware court’s ruling specifies that Tesla’s board must review Mr. Musk’s compensation.
Last month, two weeks before the ruling, Mr. Musk demanded that the board significantly increase its powers if Tesla wanted it to continue developing products based on artificial intelligence. Mr. Musk owns about 13% of Tesla’s shares and wants to obtain voting rights equivalent to at least 25% of the shares.
Mme Denholm will play a key role in any decision to move Tesla’s incorporation and in negotiations with Mr. Musk over his compensation and powers. She has made no statement on the matter and did not respond to an interview request.
Mme Denholm spent more than 40 years in operational and financial roles in major companies in Australia and the United States. She has a reputation for being calm and discreet, and for knowing when to take calculated risks. As CFO of Juniper Networks, for example, she resisted pressure from Wall Street, which demanded layoffs and reduced spending. She defended the decision to invest in research and development. This strategy has paid off, some analysts say.
“She’s very down to earth, very independent-minded, she walks straight and she’s a very relaxed character,” says Pierre Ferragu, a partner at New Street Research, who covered Mme Denholm at Juniper. “I don’t think there is a better person for this very special position” at Tesla.
Perhaps the biggest risk of his entire life was agreeing to go to Tesla.
During a 2022 speech in Sydney, Mrme Denholm said friends advised him against accepting the offer from Mr. Musk, who was forced in 2018 by the Securities and Exchange Commission (SEC) to cede the chairmanship of the board. The SEC criticized Mr. Musk for claiming on Twitter that he had obtained the necessary financing to privatize Tesla when his project was in its infancy.
From Telstra to Tesla
Her friends had warned her that she was embarking on a business that was “unprofitable at the time, and whose founder is still going against the grain,” Ms.me Denholm, quoted by local media. She initially refused, according to legal documents, but he insisted, and she eventually said yes, resigning from her job as chief financial officer at Telstra, an Australian telecommunications company.
Mme Denholm did not know Mr. Musk until 2014 when a Tesla board member approached her.
She has since praised Mr. Musk’s vision, discipline and resilience in interviews, but for the most part she avoids talking about him or his eccentric comments about X.
According to Conor Wynn, a corporate decisions expert at Monash University in Melbourne, Australia, Mr. Musk may have chosen Mme Denholm because she is very different from him and has skills that he does not have.
Having a hypercreative mad genius as CEO is not enough. You also need someone who knows how to translate these ideas into actions, who has a good approach with people and who moves projects forward.
Conor Wynn, business decisions expert at Monash University in Melbourne
But other experts believe that this complementary role is only part of M’s task.me Denholm. As chair of the board, she has a duty to oversee the CEO and act in the best interests of all Tesla shareholders.
Mme Denholm may have even more work to do this year. Besides Tesla’s possible Texas incorporation and its CEO clamoring for more power, Tesla stock has fallen about 24% this year because investors worry about slowing sales and collapsing profits .
This article was published in the New York Times.
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