H. Peter Haveles Jr. and James D. Rosener Quoted in The Deal Article, 'Re-engineering Tesla's Board'
Pepper partners H. Peter Haveles Jr. and James D. Rosener were quoted in the October 3, 2018 The Deal article, " Re-engineering Tesla's Board."
"Whatever decision is made both with respect to the chair and the two new directors will receive substantial market scrutiny," said Peter Haveles of Pepper Hamilton LLP.
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"Tesla's board would have to balance [Tesla director James Murdoch's] ability to be independent with his one-year head start on knowledge of the company and its challenges and opportunities," Pepper Hamilton's James Rosener said. "While a fresh start may be what the market thinks is best, if James Murdoch comes to it with an independent view and an understanding of what that role is and the support of the rest of the board, I don't think it's disqualifying that he's been there a year."
Murdoch is on the Tesla board "by virtue of what he and his family have accomplished, as opposed to being a member of the Musk social club," Haveles added.
His experience could have value given the complexity facing Tesla, as the company enters a crucial phase in production of its Model 3 electric vehicle and may need to tap the capital markets to address upcoming maturities. "It has a lot of difficult strategic and operational goals that it has to meet over the next 12 to 18 months," Haveles said. "To have someone who is totally green coming in as the chair is not particularly helpful."
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"You might want someone with a strong financial background either from an operating sense, someone with a long career as a CFO or from an investment banking sense, someone who can provide guidance on the board level to deal with what are very substantial financial issues for the next 12 months," Haveles said.
Given California's new boardroom diversity law, Rosener suggested that Tesla could add a woman investment banker.
The other independent direct could be "someone from the auto or manufacturing world who has strong board experience," he suggested.
The board makeover could continue the next time Tesla elects directors. "This is also an opportunity for some of the directors who may be closer than they should be to leave," Rosener said.
Content contributed by attorneys of Troutman Sanders LLP and Pepper Hamilton LLP prior to July 1, 2020, is included here, together with content contributed by attorneys of Troutman Pepper (the combined entity) after the merger date.