EV builder Tesla added Oracle’s Larry Ellison and Walgreens’ Kathleen Wilson-Thompson to its board of directors, as part of the terms of its settlement with the SEC, effective December 27.

The settlement (timeline here) stems from an August tweet in which Tesla CEO Elon Musk claimed that he had secured funding for a $70 billion go-private effort. Either Musk had pulled off a huge financial coup — or would soon be facing an SEC investigation for possibly misleading investors.



It turned out to be the latter.

As part of the September settlement with the SEC, Musk had to step down as chairman for three years and pay a $20 million fine. Tesla also had to pay a $20 million fine, add two independent directors, and form a committee, advised by a securities expert, to monitor Musk's public comments about Tesla on social media. Tesla has until January 14 to apply the oversight rules.

In an interview with 60 Minutes earlier this month, Musk said that he does not respect the SEC.

Independent directors? Independent chair?

These SEC-mandated changes are intended to provide an independent force on the board. Current not-so-independent Tesla board members include the brother of the CEO and investors in Musk companies PayPal and SpaceX.

New board member Larry Ellison is the 74-year-old chairman, co-founder and CTO of Oracle. He’s one of the world’s richest people (with a net worth of approximately $54.5 billion) and a bit of a maximalist. Ellison backed Marco Rubio’s PAC with millions in the 2016 U.S. presidential race.

A few months ago, we reported on Ellison as he digressed a bit (relevant clip starts at 2:21:40) during an Oracle analyst meeting to talk Tesla. He said that he considers Musk a "very close" friend. He added that Tesla is his "second-largest investment."

Ellison purchased 3 million shares of Tesla earlier this year, according to the company, worth close to $1 billion at its current share price.

But, according to CNBC, a Tesla spokesperson “downplayed Ellison and Musk's personal relationship, saying the two had only socialized a handful of times and always in a group setting,” adding that “Musk and Ellison had not spoken for about a year leading up to Ellison's appointment to the board.”

The difference between Ellison’s purported “very close” friendship with Musk and the relationship described above is the difference between a nonindependent and an independent director, Ellison’s $1 billion investment notwithstanding.

On a similar note, existing board member Robyn Denholm was named chair in November.

Musk said in the same 60 Minutes interview that he handpicked Robyn Denholm to be his replacement as Tesla chairman, which makes her only arguably independent in a role he doesn’t seem to respect. He tweeted that “'Chairman' is an honorific, not executive role, which means it’s not needed to run Tesla. Will retire that title at Tesla in 3 years.”

Kathleen Wilson-Thompson is the global head of human resources and executive VP at Walgreens Boots Alliance, the largest pharmacy and wellness firm in the U.S., with more than 350,000 employees.

Meet the old board

Here are the current members of the Tesla board.

Brad Buss: Former CFO at Musk family firm SolarCity.

Antonio Gracias: Gracias is a dubiously independent director with early investments in Tesla as well as Musk's rocket company, SpaceX.



Ira Ehrenpreis: Venture capital investor who put money into Tesla while at Technology Partners.



Kimball Musk: Restaurateur and brother of Elon Musk.



Steve Jurvetson: The investor and technologist is on a very extended leave from the board after an alleged sexual misconduct episode at the venture firm bearing his name. He's been busy raising a big, new fund.



Robyn Denholm: COO of telecommunications firm Telstra. Prior to Telstra, Denholm was CFO and COO at Juniper Networks. Unique among board members, she actually worked in the automotive business — at Toyota Motor Corporation Australia. Denholm was named chair in November.



Linda Johnson Rice: Chairman of Chicago-based Johnson Publishing Company, Rice joined the board in 2017.



James Murdoch: Rupert Murdoch's son launched record label Rawkus Records (roster included Black Star). At 30, he served as CEO of BSkyB. Murdoch became CEO of Twenty-First Century Fox in 2015.

Twitter oversight committee

The Tesla board remains relatively unburdened by automotive and manufacturing experience. Only new chair Denholm can boast of some automotive history. Ellison’s ownership of very expensive autos does not count.

Now that the directorships and chairperson role have been addressed, all that remains of Tesla’s compliance with the SEC settlement is the formation of the Twitter oversight committee by January 14. The power of the committee to curb Musk’s behavior on Twitter remains to be seen.

It also remains to be seen if Musk can stay on the right side of the SEC in 2019.