cc Friday, December 28, 2018 latimes.com/news

New Tesla director Larry Ellison is a friend of Elon Musk. Will he stand up to the mercurial CEO?

By RUSS MITCHELL TIMES STAFF WRITER Big decisions at Tesla tend to spark controversy. That was the case Friday, when the company named Oracle’s Larry Ellison to its board of directors. Ellison was one of two “independent” directors required to be added to Tesla’s board as part of a settlement with U.S. reg- ulators who demanded more over- sight of CEO Elon Musk. Also named was Kathleen Wilson- Thompson, who heads human re- sources at Walgreens Boots Alli- ance. Oracle CEO Larry Ellison, at Oracle OpenWorld in San Francisco in 2012, is Musk got into trouble with the now on the Tesla board. (Eric Risberg / Associated Press) Securities and Exchange Commis- sion in early August for tweeting The 74-year-old Ellison is one ing he doesn’t know what he’s do- he had “funding secured” to take of Musk’s most vocal supporters ing. Well, who else is landing the electric car company private at and described him as a “very close rockets? You ever land a rocket on $420 per share. Shares shot up friend” at a financial analyst meet- a robot drone? Who are you?” 11%, then fell as it became clear ing in October, leading some ob- A Silicon Valley legend, El- the claim had no substance. servers to wonder whether he’d be lison built Oracle into a global Charged with fraud, Musk set- willing to challenge Musk. powerhouse from scratch. The tled with the SEC without admit- At the same meeting, Bloom- company’s famously aggressive ting guilt. Tesla was required to berg reported, Ellison criticized sales force turned Oracle into the name two new independent direc- those who complained about world’s biggest provider of corpo- tors to its board as part of the deal, Musk’s pot smoking on live Inter- rate databases and other essential replace Musk as chairman, and net TV and his controversial be- back-office software and services. oversee Musk’s public communi- havior on Twitter. (Recently, the company’s been cations. (Board member Robyn “This guy is landing rockets,” criticized for moving late into Denholm, an Australian telecom- Ellison said. “You know, he’s cloud computing.) munications executive, was named landing rockets on robot drone chairman in November.) rafts in the ocean. And you’re say- With a fortune of $58 billion, had picked the kind of of people been the puppet master,” he said. ranking tenth on Forbes’ list of the SEC probably envisioned.” “I think they will want to stand tall world billionaires, Ellison carries a Erik Gordon, a business profes- here.” Hollywood-style glamour unusual sor at the University of Michigan, Although Ellison and Musk in Silicon Valley. He owns several was also critical: “Tesla has man- have formed a “mutual admiration mansions along the beach in Mali- aged to comply with the letter of society,” Greif said, that could bu, races sailing yachts, owns mo- the SEC settlement without even change. tor yachts, drives exotic automo- attempting to comply with the spir- “Right now, it’s kumbaya,” he biles, and owns practically all the it of the settlement.” said. “But both are strong, free- land on Lanai, one of the Hawaiian But whatever the SEC might thinking entrepreneurs and at some islands. According to Tesla, El- have envisioned, “independent” is point they could clash” if Ellison lison holds 3 million Tesla shares, a legal term in this case, and under sees his Tesla stake under threat. about 1.7% of the company, worth the settlement “being friends does Ellison is not without his blind about $1 billion. not make one not independent,” spots. He was an investor and ad- Musk ranks 54th of the Forbes said Jay Dubow, an attorney at the visor in Theranos, the fraudulent list, with an estimated net worth of Pepper Hamilton law firm who blood-testing company led by about $20 billion. His primary res- worked in the SEC’s enforcement young entrepreneur Elizabeth idence is a mansion in Bel-Air. division early in his career. Holmes and chronicled in the best- Despite Ellison’s very-close- There is nothing unusual about selling book “Bad Blood.” Holmes friend comment, a Tesla spokes- a chief executive choosing a friend was so close to Ellison, according man told The Times that the pair’s or close acquaintance to their to author John Carreyrou, that she in-person interactions were rare. board of directors, Dubow said. called him “Uncle Larry.” “Right now, it’s kumbaya. But both are strong, free-thinking entrepreneurs and at some point they could clash.”

—LLOYD GREIF, GREIF & CO.

Ellison’s chumminess with “Most people usually pick people The Theranos connection shows Musk causes some corporate gov- they know to serve on their “Ellison is attracted to big, bold ernance experts to wonder how boards.” personalities,” Gordon said. “It much oversight investors can ex- Just because Ellison considers doesn’t show that his due diligence pect. himself a Musk buddy doesn’t is always thorough.” “You’d want someone in that mean he won’t challenge Musk, Through Walgreens, Wilson- role who is not a friend or an ad- said Lloyd Greif, head of Los An- Thompson has her own Theranos versary, you’d want someone who geles investment banking firm connection. Walgreens was a could stand up to him as a counter- Greif & Co. Theranos investor and, at one weight to his authority on the “Larry is a smart guy, a strong point, had installed Theranos test- board,” said Charles Elson, an ex- guy, he’s not going to be any- ing devices in some of its stores. pert in corporate governance at the body’s patsy,” Greif said. “And University of Delaware. he’s going to be paying attention But Elson said he’s not sur- for all kinds of reasons, including prised at Musk’s choice of new his own wallet.” board members. “This is the same Both Ellison and Wilson- fellow who continued to [criticize] Thompson have their reputations the SEC after the settlement. I on the line, according to Greif. would have been surprised if he “This has been Elon’s board, he’s