The outgoing CEO of 21st Century Fox, James Murdoch, is reportedly next in line to replace Tesla CEO Elon Musk as the chairman of Tesla’s board, despite activist investors noting a “troubling history” as a director.
Reuters reports that James Murdoch, the outgoing CEO of 21st Century Fox, is in line to replace Tesla CEO Elon Musk as chairman of the Tesla board, a position which Musk was forced to resign from following a settlement with the Securities Exchange Commission. As part of his settlement with the SEC, Musk and Tesla were forced to pay $20 million fines each, Musk was allowed to stay on as Tesla’s chief executive but had to step down as chairman of the board and two new independent directors were to be appointed.
Murdoch is a non-executive director of Tesla and has reportedly signaled that he wants to take over as chairman according to sources familiar with the situation, according to Reuters. James Murdoch is the son of billionaire media mogul Rupert Murdoch and joined Tesla’s board after years of working in media. He has no experience in running an automotive business, but may provide a steady figurehead that many Tesla board members appear to think the company needs.
Proxy advisors Glass Lewis & Co, Institutional Shareholder Services, and activist investor CtW Investment opposed Murdoch’s re-election to the board in May, citing a lack of relevant experience and a “troubled history as an executive and director.” Glass Lewis specifically warned that Murdoch already serves on too many boards, if he is chosen to succeed Musk there may be some board members unhappy with the decision.
Following the sale of the bulk of 21st Century Fox’s assets to Walt Disney, James Murdoch’s younger brother Lachlan Murdoch is expected to succeed him as CEO. Musk has approximately 45 days to step down as chairman of Tesla’s board under the rules of the SEC settlement and must not take the position back for at least three years.
Murdoch, Tesla and 21st Century Fox were unavailable for comment, according to Reuters.