WOKE WEDNESDAY: Tesla’s board held hostage, Boeing’s board sucks, Disney’s board slate omission, OpenAI’s board confusion

Live from an ESG-decorated water heater, it’s the ESG Industry’s ONLY weekly woke data podcast, featuring AnalystHole Matt Moscardi! In today’s ESG-bedazzled CFO called January 17, 2024: boards!

Our show today is being sponsored by Free Float Analytics, the only ESG data platform to measure real board influence and diversity power gaps

DAMION1

1. Elon Musk has issued an ultimatum to Tesla's board: hand over control of 25% of the votes, or he'll put the brakes on AI development.

1. In a post on X, the billionaire said he would feel "uncomfortable" expanding the EV company's AI and robotics capabilities without controlling a quarter of the voting block. Musk added that the voting power would make him "influential" but ultimately overrideable regarding major decisions.

2. Tesla board: 8 votes

1. Elon Musk

1. Elon

2. Robyn M. Denholm

1. Is chair because of SEC

3. Ira Ehrenpreis

1. Ira Ehrenpreis, an investor who heads Tesla’s compensation committee, has been close to Mr. Musk for years. According to court documents, he helped Mr. Musk design the 2018 pay deal, which, after Mr. Musk fulfilled 11 of 12 performance goals, paid out stock worth about $40 billion at Tesla’s current share price.

2. In 2018, Tesla paid Mr. Ehrenpreis nearly $10 million, almost all in stock options, to cover three years, for his board duties.

4. Joe Gebbia

1. AirBnB co founder - on AirBnB board with partner from Sequoia Alfred Lin (Sequoia funded virtually every Musk endeavor) and Jeff Jordan from Andreessen (bromance with Marc) and the CFO of Block Amrita Ahuja (owned by bro Jack Dorsey)

5. James Murdoch

1. described himself in testimony as a friend of Elon Musk since 2006

6. Kimbal Musk

1. haha

7. JB Straubel

1. Tesla co-founder/CTO for 14 years

8. Kathleen Wilson-Thompson

2. Boeing’s board faces scrutiny yet again: ‘It’s a bad board, and it has been a bad board for a long time’

1. In 2021, Boeing’s board famously paid a hefty $246 million fine to settle a shareholder lawsuit that accused it of failing in its fiduciary duty to monitor safety, and initially lying about its response to the first of two fatal 737 Max 8 crashes.

2. Nell Minow: the board is a “serial offender” that “doesn’t learn from past mistakes.”

1. “It’s a bad board, and it has been a bad board for a long time,” she tells Fortune.

2. Part of the problem is that the board hasn’t felt enough pressure to change, Minow explains. Boeing, as half of a duopoly, has only one major competitor, Airbus. It also holds government and commercial airline contracts that guarantee it business. Given the company’s market dominance, the board has allowed Boeing to put financial—not aviation—engineering first. “The inevitable results were what we saw,” says Minow, who owns Boeing shares.

3. Consumer advocate Ralph Nader, whose grandniece died in the second Boeing 737 Max 8 crash, called for the whole board to resign.

4. Jo-Ellen Pozner, associate professor of management at Santa Clara University’s Leavey School of Business, says she applauds the company for adding aviation and risk experts while replacing directors with financial, government, and trade expertise. “If I were putting together a board for Boeing, this is what I would choose,” she says of the current group.

5. To Nell’s point: Directors since the last time it was bad (Dave Calhoun: promoted from LD to CEO)

1. *Lynne Doughtie: finance expert from KPMG

2. David Gittlin: “extensive expertise in aerospace safety (including the development and manufacture of aircraft engines and power systems), manufacturing and operational excellence”

3. Stacye Harris: former Inspector General of the Air Force

4. *Akhil Johri: basically a former CFO: UTC and Pall

5. David Joyce: former CEO at GE Aviation

6. *Steven M. Mollenkopf: former CEO at Qualcomm (semiconductors)

3. Disney Rejects Nelson Peltz’s Push for Board Seat

1. “In deciding not to recommend Mr. Peltz, the directors considered a number of factors, including that in a two year quest for a seat on the Disney Board, Mr. Peltz had not actually presented a single strategic idea for Disney,” the company said in its filing.

1. Peltz is backed by a former Disney executive–former Marvel Chairman Isaac Perlmutter–and is also nominating former Disney CFO Jay Rasulo to the board.

2. Peltz seems to be looking for a shitshow.

2. In a surprise:

1. Disney also rejected three board nominees put forward by investment firm Blackwells Capital, which had said its candidates would support Iger. Disney cited the Blackwells’ nominees lack of experience as directors of large public companies.

1. Former Warner Brothers executive Jessica Schell

1. Former EVP and GM, Content Sales and Lifecycle Marketing, Warner Bros. Discovery

2. expertise in content distribution

2. real estate investment executive Craig Hatkoff, who co-founded the Tribeca Film Festival with Jane Rosenthal and Robert DeNiro

1. Hatkoff sits on SL Green Realty’s board, where he holds 5% influence and is hitting .574 overall

3. And TaskRabbit founder and former CEO (2008-2016) Leah Solivan

1. General Partner at Fuel Capital

4. Blackwells is also proposing to allow incumbent board directors who lose their seats to Blackwells nominees to be reinstated through a board expansion, the sources said.

4. OpenAI CEO Sam Altman opens up about being fired by the board

1. Altman said the night he was pushed out by the board was “wild,” and he felt “super confused” and was “super caught off guard.”

2. “But this is the structure, and I immediately just went to go thinking about what I was going to do next. It was not until some board members called me the next morning that I even thought about really coming back,” continued Altman, reflecting on the dramatic turn of events that led to his ouster — and subsequent reinstatement — in November. “But, like, the board did have all of the power there.”

3. When asked whether OpenAI would reform its structure and become a traditional Silicon Valley for-profit company, Altman was adamant that his startup wouldn’t go that way.

1. “We will never be a traditional company,” he said. “But the structure, I think we should take a look at the structure. Maybe the answer we have now is right, but I think we should be willing to consider other things.”

2. Altman added that now was not the time to reconsider company structure. Instead, he said the focus was on the board first.

3. “I think one of the things that’s difficult to fix for us about OpenAI is the degree to which our team and the people around us, invest in us or whatever, are committed to this mission,” Altman said.