Raising Concerns
Senator Elizabeth Warren (D-Mass.) has urged the Securities and Exchange Commission to investigate the independence of the board at Tesla Inc.
Recent Developments
What Happened: In a letter to the SEC, Warren expressed worries that CEO Elon Musk might be utilizing his control for personal gain rather than the benefit of Tesla’s shareholders.
Allegations
Warren also raised concerns about potential conflicts of interest between Tesla and Musk’s private ventures, including social media platform X.
Musk responded to Warren’s allegations, implying that they might be influenced by her advisor, Joseph Bankman, who happens to be the father of Sam Bankman-Fried, the founder of collapsed crypto exchange FTX.
Significance of the Probe
Why It Matters: The NASDAQ mandates a majority of board members to be independent. The SEC can step in if it finds that a company has misled investors regarding the board’s independence.
Warren’s concerns are not a first at Tesla. In January, Delaware Court of Chancery judge Kathaleen McCormick invalidated a 2018 pay package worth about $56 billion awarded to Musk by the Tesla board.
Parting Thoughts
The judge deemed the award “unfathomable,” criticizing the board’s lack of independence from Musk and the governance process leading to the grant.
For more of Benzinga’s Future Of Mobility coverage, check the link here.
Further Reading: Ross Gerber’s reaction to a trader’s risky Tesla stock investment in 2022.
