The Joe Rogan Podcast/YouTube
-
Elon Musk will be able to help pick the person who will succeed him as chairman of Tesla.
-
Musk is stepping down from the role as a result of his settlement agreement with the Securities and Exchange Commission (SEC) over his series of tweets about possibly taking the company private — including the infamous "funding secured" tweet.
-
He will also be able to help pick the two new independent directors the SEC ordered Tesla to add to its board.
-
Tesla's board has already been under fire for being too deferential to Musk.
-
Business Insider got a copy of the settlement documents, which lay out the specific terms that Tesla and Musk agreed to.
Elon Musk may soon be out as chairman of Tesla, but he'll be able to pick his successor and serve with that person on the electric car company's board.
The settlement agreements Musk and Tesla reached with the Securities and Exchange Commission don't include any kind of bar on Musk's continued service as a director of the car company. The agreements, copies of which Business Insider obtained from the Securities and Exchange Commission on Wednesday, also do not include any provision that would bar him from voting his shares in favor of or against nominees to the Tesla's board.
That means that despite being forced to step down as chairman as part of those agreements, Musk could continue to have a lot of sway over the body that is supposed to oversee him as CEO. Musk is Tesla's largest shareholder, holding some 22% of the company's outstanding shares at the end of last year.
"Musk is still the CEO and his friends still control the board, so tell me what really changed," said Lynn Turner, a former chief accountant of the Securities and Exchange Commission, in an interview with Business Insider.
The settlements were related to Musk's infamous "funding secured" tweets regarding a potential move to take Tesla public. The SEC charged that he made those statements on Twitter knowing or having reason to know that they were false and misleading. After Musk initially rejected a settlement offer from the agency, which the SEC responded to by suing him, Tesla and its CEO accepted revised settlement agreements that are somewhat harsher.
Tesla's board has drawn fire for being too deferential to Musk
Under those agreements, which still have to be approved by a federal court, Tesla agreed to replace Musk with an independent chairman and to name two new independent directors. Tesla agreed to name a new chairman within 45 days of the settlement, and to name the new directors within 90 days.