Elon Musk to Resign as Tesla Chairman
Musk and Tesla will each pay a $20 million fine
Well, it's official. Reuters reports that Judge Alison Nathan has approved the U.S. Securities and Exchange Commission's settlement with Tesla chairman and CEO Elon Musk.
Under the agreement, Musk will resign as chairman for at least three years and pay a $20 million fine. Tesla will need to replace Musk with an independent chairman, appoint two new independent directors, and create a committee to approve "any such written communications that contain, or reasonably could contain, information material" to the company or its shareholders. Even though Tesla hasn't been charged with fraud, it will also be required to pay a separate $20 million fine. Musk will stay on as Tesla's CEO.
The SEC's investigation began in early August after Musk tweeted that he had secured funding to take Tesla private at a price of $420 per share. He later explained in a company blog post that the tweet wasn't a joke and that he was in negotiations with the Saudi Arabian sovereign wealth fund. Ultimately, though, the deal fell through, and Musk was unable to take Tesla private.
The terms of the settlement give Tesla until November 13 to appoint a new chairman. At the moment, it's not clear who will replace Musk. The Financial Times reported last week that James Murdoch, CEO of Twenty-First Century Fox, was being considered, but Tesla has yet to make an official announcement.