Tesla has appointed Oracle co-founder Larry Ellison to its board, in response to calls for independent oversight from regulators, according to Reuters.
Ellison is also a Tesla shareholder and has called himself a close friend of Elon Musk, who caught the attention of the Securities and Exchange Commission (SEC) in August, when he tweeted that he was planning to take the company private and had the funding available to do so.
The SEC charged Musk with fraud over what it characterized as misleading statements that had boosted the company’s stock, which rose to near record prices the same day. The Tesla CEO ultimately agreed to pay a $20 million fine and to step down as chairman of the company for three years. The move came during a period that saw other risky behavior by Musk, and investors have since demanded independent checks on his power at Tesla.
Ellison served as Apple’s director during a period of renewed success after Steve Jobs returned in 1997. Now worth about $55 billion, he is a noted philanthropist, and co-founded the software and technology company Oracle. Earlier this year, Ellison purchased three million Tesla shares.
In October, Ellison said he was “very close friends” with Musk.
“He’s landing rockets on robot drone rafts in the ocean,” he said in a conference call with analysts, “and you’re saying he doesn’t know what he’s doing. Well, who else is landing a rocket?”
Director of the University of Delaware’s corporate governance center, Charles Elson, criticized the appointment, saying Ellison is too close to Musk and also lacks experience at an industrial company such as Tesla:
“Why would you put a friend (on the board) if the idea of the two independent directors were to be objective? Investors who were hoping for two newly objective directors who could stand up to Mr. Musk would be rather disappointed by the choice.”
Reuters was unable to reach the SEC for a comment, but former SEC chairman Harvey Pitt told the news agency that he sees the move as a step in the right direction.
“His personal investment in Tesla stock — said to be his largest personal investment outside of Oracle — means he will be focused on ensuring that Tesla develops profitable strategies. He also has the stature to stand up to Mr. Musk, should that become necessary.”
The value of the company’s shares rose 5.6 percent on Friday, reaching $333.87.