Photo: Bloomberg Photo by Qilai Shen
The mistakes that made 2018 a frightening year for Elon Musk are back.
Tesla announced that its legal adviser would leave Wednesday, two months after hiring him in the wake of the dispute between Musk and the US securities regulators. A few hours before this news, the CEO sent out tweets reminding those who put him and the company at risk last year.
Dane Butswinkas, the litigator who has represented Musk in his legal battle with the Securities and Exchange Commission of the United States, is going away because of a poor cultural adjustment at Tesla and the desire to return full-time to his trial practice at Williams & Connolly in Washington. Jonathan Chang, vice president of Tesla's legal department, takes office immediately.
The departure took place shortly after the screening of a production of Musk, who tweeted and then backtracked on Tuesday night. The developments raise new concerns about the retention of key executives and the CEO's social media habits, issues that have distracted Tesla's manufacturing achievements in 2018.
"This is another example of a series of highly publicized leadership departures," said Cowen & Co. analyst Jeffrey Osborne, who credits Tesla with the equivalent of a sale. "Investors have become insensitive to turnover because it is a persistent problem in the technical, accounting, human resources and now legal areas." of one more thing that worries investors. "
Tesla shares were traded up to 1.4% at 11:40 am Wednesday in New York. Musk, 47, had already surprised investors at the end of a call for results last month by announcing the departure of Chief Financial Officer Deepak Ahuja. Last year, he lost senior executives in Tesla's sales, accounting, finance, materials management, human resources and communications departments.
Musk tweeted Tuesday night that Tesla would manufacture about 500,000 cars in 2019. He corrected himself in a few hours to say that he thought the company would produce at an annualized rate of 500,000 vehicles from here. the end of the year.
If sent by another company executive, the messages could be read as an innocuous mistake. But Tesla was supposed to have internal controls in place last year to prevent Musk from posting important company information without prior authorization. The SEC ordered the electric car manufacturer to employ or appoint a securities lawyer to review communications from Musk and other senior officers on Twitter.
Representatives of Tesla and the SEC did not immediately respond to requests for comments on Musk's tweets.
The SEC punished Tesla after allegedly defeating Musk by tweeting in August. He had secured a "secured financing" to take the company at a cost of $ 420 per share. The agency said the statement, along with other claims made by the CEO on Aug. 7, was false and misleading and related to Tesla's actions.
Musk and Tesla arranged without admitting or denying the wrongdoing and agreed to pay fines of $ 20 million. The Company's Board has formed a Disclosure Control Committee composed of three independent directors.
The forecasts of Tesla and Musk also remain a point of contention with the authorities. The SEC has assigned the company to appear for its forecast of model 3 production rates in 2017 and other public statements related to the production of the sedan.
The Ministry of Justice has asked Tesla to voluntarily provide information on production forecasts and confidential statements. He is also conducting his own investigation, according to a document filed Tuesday with the regulations. The company made the same disclosure in November and said this week that no major developments have occurred since.
"To our knowledge, no government agency in an ongoing investigation has concluded to the existence of wrongdoing," Tesla said in his 10-day filing on Tuesday. The company said it cooperates with the authorities and can not predict the outcome of the investigations. He added that if the government decides to take enforcement action, it could have a significant negative impact on the company.
Chang, 40, has been with Tesla for almost eight years and has managed most of his legal organization during his tenure, according to the company. He began advising the automaker in 2006 as an outside attorney at the law firm Latham & Watkins. He will report directly to Musk.
Butswinkas, 57, will continue to work with Tesla in an external advisory role, according to a company release by email. He was hired in December to replace Todd Maron, who left the company after leading his legal department since 2013 and represented Musk through two divorces.
"The fact that he continues to work with Tesla as an outside attorney is a sign that, legally, everything is fine at Tesla," said Gene Munster, managing partner of the venture capital firm Wolf. Ventures. "Despite Tesla's persistent difficulties in maintaining its top executives, we continue to believe that the company will successfully overcome the waves of electric vehicles and autonomy."
– – –
Cécile Daurat and Ben Bain of Bloomberg contributed.