With Settlement Approved, Elon Musk Has 45 Days to Vacate the Chairman's Seat

Steph Willems
by Steph Willems
with settlement approved elon musk has 45 days to vacate the chairmans seat

Tesla CEO Elon Musk will soon be gone as company’s chairman, but a replacement — someone who’ll need to occupy the position for three years — has yet to be named.

The hourglass was flipped after U.S. District Judge Alison Nathan approved a settlement between Musk and his company and the U.S. Securities and Exchange Commission Tuesday. Musk has 45 days to step down as chairman. Double the amount of time is allowed for the automaker to name two independent board members, though Musk and Co. only have two weeks to pony up their $20 million fines.

The settlement, which stayed on track despite Musk’s attempt to screw the whole thing up, contains a punishment perhaps far greater than those listed already: Musk now requires a Twitter parent.

Yes, the social media portal that got him in deep trouble with the SEC and sparked a stock price plunge is being reined in, at least on Musk’s end. A company lawyer will have to oversee all Musk communications, including tweets. If it looks like a message sent into the social media ether might exert some sort of force on Tesla’s stock, that lawyer has the ability to say, “No, go to bed.”

While it was his declaration of “funding secured” (for his August go-private bid) that landed Musk in the crosshairs of the securities regulator, numerous other non-financial tweets have all served to depress the company’s share value. This issue became more, ahem, pronounced over the past few months. Regardless, word of the settlement’s approval clearly pleased investors and analysts; as of publication time, the stock’s up 6.2 percent in Tuesday trading.

As we’ve gone over the downright odd chain of events that precipitated this settlement before, there’s no need to cover every inch of past ground. Essentially, the 11th hour settlement kept Musk at the helm of Tesla and made an SEC fraud lawsuit disappear, but shortened the chief executive’s leash.

Between the August 7th (fateful tweet day) and now, Tesla’s market value shrunk from $65 billion to $46 billion.

[Source: Reuters, MarketWatch]

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2 of 12 comments
  • Vulpine Vulpine on Oct 16, 2018

    45 days should be just long enough for him to make the relevant announcement via the quarterly report as to whether or not Tesla managed to show real profit for the first time in several years... profit that, instead of just one quarter of positive cash flow, could herald an extended period of profits leading to Tesla finally proving itself as a car company.

  • EBFlex EBFlex on Oct 16, 2018

    He will still be too close to Tesla. Hes a cancer.

  • 3SpeedAutomatic And this too shall pass.....Ford went thru this when the model T was introduced. It took the moving assembly line to make real money. As time progressed, it got refined, eventually moving to the Model A. Same kind of hiccups with fuel injection, 4 speed automatic, Firestone tires, dashboards with no radio knobs, etc, etc, etc. Same thing with EVs. Yep, a fire or two in the parking lot, espresso time at the charging stations, other issues yet to be encountered, just give it time. 🚗🚗🚗
  • Art Vandelay 2025 Camaro and Challenger
  • Mike Beranek Any car whose engine makes less than 300 ft-lbs of torque.
  • Malcolm Mini temporarily halted manual transmission production but brought it back as it was a surprisingly good seller. The downside is that they should have made awd standard with the manual instead of nixing it. Ford said recently that 4dr were 7% manual take rate and I think the two door was 15%.
  • Master Baiter It’s hard to make predictions, especially about the future. It will be interesting to see if demand for Ford’s EVs will match the production capacity they are putting on line.