Tesla's chairman under the supervision of Elon Musk

Elon Musk, the CEO and public face of Tesla, is constantly making news and posting his opinions on his social media site X. But the electric car company has another leader – someone who has a much lower profile.

For more than five years, Tesla's board has been led by Robyn M. Denholm, a technology executive who rarely speaks publicly outside her native Australia and hardly posts anything on X.

To some analysts and investors, Ms. Denholm is the “adult in the room” who helped Mr. Musk make Tesla the world's most valuable automaker. But her critics say she has failed in her most important job: controlling Mr Musk.

Late last month, a Delaware judge sharply criticized Ms. Denholm's leadership as he struck down Mr. Musk's 2018 compensation package worth more than $50 billion. Ms. Denholm took a “bland approach to her oversight duties” at Tesla, Chancellor Kathaleen St. J. McCormick said of the Delaware Court of Chancery.

The judge also questioned whether Ms. Denholm could be independent of Mr. Musk, because her job on Tesla's board had paid her more than $280 million. Last year, Ms Denholm described that reward in court as “life-changing”. Her compensation is much higher than what other major American companies such as Apple and Alphabet, Google's parent company, pay the independent chairmen on their boards.

“Musk operates as if free from board oversight,” the judge said in her ruling.

Mr Musk has spoken out against the ruling, saying he planned to ask shareholders to allow Tesla to move its incorporation to Texas, where the company is headquartered. The court's ruling also means that the board must draw up a new salary package for him.

In addition, last month, two weeks before the Delaware ruling, Mr. Musk demanded that Tesla's board significantly increase its control over the company if it wanted him to continue developing artificial intelligence products at Tesla. Mr Musk, who owns about 13 percent of the company's shares, wants voting rights equal to at least 25 percent of Tesla's shares.

Ms Denholm will be closely involved in any decision to change the company's location and in negotiations with Mr Musk over his salary and desire for greater control. She has not said anything about this publicly and has not responded to a request for an interview.

Ms Denholm has worked for more than 40 years in operational and finance roles at major companies in Australia and the United States. She is widely regarded as a quiet, understated presence with an appetite for occasional calculated risks. As chief financial officer at Juniper Networks, for example, she resisted pressure from Wall Street to cut costs and lay off employees, defending the company's decision to invest in research and development. The strategy paid off, some analysts said.

“She is very down to earth, very honest, very independent and has a very relaxed nature,” said Pierre Ferragu, managing partner at New Street Research, who defeated Ms. Denholm at Juniper. “I don't think you could have found a better chairman for this very unique job” at Tesla.

Perhaps the biggest risk she has taken is agreeing to lead Tesla's board.

Addressing an audience at a 2022 event in Sydney, Australia, Ms Denholm said she had friends who advised her not to accept Mr Musk's offer after he agreed to step down as chairman in 2018 as part of a settlement with the Securities and Exchange. Commission. The settlement stemmed from Musk's claim on Twitter that he had secured the financing to take Tesla private, even though his plan to do so was in an embryonic state.

Her friends had warned her that she would be heading the board of a company “with a contrarian founder, and that it was not profitable at the time,” Ms. Denholm said, according to accounts of the speech. She initially turned Musk down, according to legal documents, but he asked her again, and she agreed, resigning as chief financial officer at Telstra, an Australian telecommunications company.

One of three children of European immigrants to Australia, Ms Denholm, 60, grew up in the suburbs of Sydney, where she attended what she described as a “public garden school”. On weekends and during school holidays, she helped her parents balance the books and service cars at their gas station.

Ms Denholm studied economics at the University of Sydney and started her career at Arthur Andersen, the accounting firm. She held a number of jobs at major companies such as Toyota in Australia, where she was among a few female managers, and at Sun Microsystems and Juniper in Silicon Valley.

In addition to her position on Tesla's board, Ms. Denholm is chair of the Tech Council of Australia, the country's preeminent technology industry association. She has owned at least three red Teslas and described herself as “genuinely curious” in an interview with Sky News in 2014. Her family investment office, founded in 2021, focuses on female-led technology startups and owns a 30 percent stake in her hometown's two basketball teams: the Sydney Kings and Sydney Flames.

Ms. Denholm did not know Mr. Musk before 2014, when a member of the company's board of directors recruited her, legal documents show. While she has praised Mr. Musk's vision, discipline and resilience in interviews, she has done just that mostly avoided discussing him or his whimsical comments about X.

Conor Wynn, a business decision-making expert at Monash University in Melbourne, Australia, said Musk may have chosen Ms Denholm because she was so different from him and had skills he might not have.

“You don't want just the mad genius at the top making things,” Mr. Wynn said. “You need someone who can translate it into action, who is people-oriented and keeps the operations moving.”

But other experts said Ms. Denholm's job was not just to complement Mr. Musk. As leader of Tesla's board of directors, she has a duty to oversee the CEO and do what is best for all of the company's shareholders.

“When Denholm took over in 2018, the hope was that she would be the adult in the room, possibly even a mother figure who could tame this wild child,” says Jo-Ellen Pozner, associate professor of management at the Leavey School of Business at Santa Clara University. “That clearly didn't happen.”

But, Ms. Pozner said, Ms. Denholm may not have been in a position to manage Mr. Musk because almost all of the other Tesla directors had personal or financial ties to him. One board member is Mr. Musk's brother, Kimbal. Several others have been closely associated with Musk personally, professionally or both for many years.

“It doesn't seem like she's prepared to rein in Elon Musk,” Ms. Pozner said.

Ms Denholm's task this year is likely to be tougher than before. Between looming decisions about the company's formation and Musk's demands for greater control, Tesla shares are down about 24 percent this year as investors worry about slowing sales and falling profits.

Last year, Ms. Denholm described at a conference how she dealt with uncertainty and doubt. Early in her career, when faced with jitters about an impending international move, Ms. Denholm said, she called her father for advice.

“He said, 'Robyn, what's the worst that could happen? You messed up and you have to come home?'” she told an audience in Sydney in May. “I kind of took that approach.”