Tensions had been mounting at the company. Sales and profits were deteriorating rapidly. Musk was spending much of his time in Washington.
Around that time, Tesla’s board met with Musk for an update. Board members told him he needed to spend more time on Tesla, according to people familiar with the meeting. And he needed to say so publicly.
Musk didn’t push back.
Musk subsequently said in an April 22 call with investors that “starting next month, I’ll be allocating far more of my time to Tesla now that the major work of establishing the Department of Government Efficiency is done.”
The Journal report said that after Musk’s public statement, the Tesla “board narrowed its focus to a major search firm, according to the people familiar with the discussions. The current status of the succession planning couldn’t be determined. It is also unclear if Musk, himself a Tesla board member, was aware of the effort, or if his pledge to spend more time at Tesla has affected succession planning.”
Tesla’s eight-member board has been criticized for having members with close ties to Musk. Last year, a Delaware judge who invalidated a $55.8 billion pay package awarded to Musk said that most of the board members “were beholden to Musk or had compromising conflicts.”
That includes Musk’s brother, Kimbal, and longtime Musk friend James Murdoch, said the ruling from Delaware Court of Chancery Judge Kathaleen McCormick. The judge also wrote that Denholm “derived the vast majority of her wealth from her compensation as a Tesla director” and took a “lackadaisical approach to her oversight obligations.” Denholm later defended Musk’s pay, telling shareholders that the large sum was needed to keep the CEO motivated.
