Tesla’s Chair Under Scrutiny for Oversight of Elon Musk

Elon Musk, the chief executive and public face of Tesla, is constantly making news and broadcasting his opinions on his social media site, X. But the electric car company has another leader — one who maintains 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 in public outside her native Australia and posts barely anything on X.

To some analysts and investors, Ms. Denholm is the “adult in the room” who has helped Mr. Musk turn Tesla into the world’s most valuable automaker. But to her critics, she has failed at her most important job: serving as a check on Mr. Musk.

Late last month, a Delaware judge sharply criticized Ms. Denholm’s leadership while striking down Mr. Musk’s 2018 compensation package, which is worth more than $50 billion. Ms. Denholm took a “lackadaisical approach to her oversight obligations” at Tesla, said Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery.

The judge also questioned whether Ms. Denholm could be independent from Mr. Musk, because her job on Tesla’s board had earned her more than $280 million. In court last year, Ms. Denholm described that pay as “life changing.” Her compensation greatly exceeds what other large U.S. companies like Apple and Alphabet, Google’s parent, pay the independent chairs on their boards.

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

Mr. Musk has railed against the ruling, and he said he planned to ask shareholders to authorize Tesla to move its incorporation to Texas, where the company has its headquarters. The court ruling also means the board must fashion a new pay package for him.