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The best scenario is that Musk stays at Tesla, but something has to change.
It seems that the main problem for Musk and Tesla is that it is surrounded by people who do not want or can not defend it, as it can easily happen with powerful people. At worst, this seems to be the case for his board of directors.
We believe that the Tesla Board of Directors needs a redesign. There are too few independent directors and too many directors with long term relationships with Musk as investors, who overlap with other companies like SpaceX, the family or the company. other. There is no one on the board who has Musk's ear to really influence him to repair those self-inflicted wounds.
The simplest and most immediate action would be that Musk resigns from his position as chairman of the board of directors and that one of the non-independent directors resigns from the board of directors to appoint a new board member. There was a vote earlier in the year to remove Musk as president, but the voting structure of Tesla shares requires a huge majority to pass the changes. The motion failed.
If Musk resigns and another puts an end to his seat, the company could consider hiring a new president with no connection to Musk, who could influence him. Al Gore, currently a member of Apple's board of directors, could be an interesting choice given his interest in climate change. Former Boeing CEO Jim McNerney would also be a good option as a former president of the company.
Beyond the change of president, other members of the board of directors with close ties to Musk should consider withdrawing voluntarily for the sake of the company. As shareholders and supporters of Tesla, it is in their best interest to see the company survive and thrive. Tesla's chances of success are better with a board that can sustainably influence the CEO.
Consider Apple's board of directors, which includes Gore, Arthur Levinson (former CEO of Genentech), Bob Iger (Disney CEO), James Bell (former Boeing CFO), Sue Wagner (co-CEO) founder, former COO BlackRock) and Ronald Sugar). Apple is not the end of the world, but that is what a board that can influence the CEO of a large global organization should look like.
Last month, we wrote an open letter to Musk that offered many suggestions, but people do not change often. The things that make Musk great are also what makes it flawed. As it is difficult to change people, the best option for Tesla is to find a way to change the forum.
Time is running out, so the voluntary option is the best. Without a voluntary change in the board of directors, qualified majority voting rules could mean an indefinite stalemate that does not benefit employees, shareholders, the board of directors or even Musk de Tesla.
Gene Munster is a Managing Partner at Loup Ventures and a former Technology Research Analyst at Piper Jaffray for 21 years.
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