Joe Gebbia, the Tesla (TSLA.O), opens new tab director who exited a board committee that made key decisions about the car maker’s future, told Reuters that CEO Elon Musk had discussed purchasing a house from his start-up and that he was concerned their friendship could be seized on to attack the committee’s independence.
Gebbia, whose start-up Samara makes tiny prefabricated houses, was one of two directors that Tesla’s eight-member board deemed independent enough to serve on a “special committee” that deliberated on the company reincorporating from Delaware to Texas.
The board formed the special committee after Musk called in January for Tesla to move its corporate domicile out of Delaware, where a court shot down his $56 billion pay package.
The special committee was initially comprised of Gebbia, an Airbnb (ABNB.O), opens new tab co-founder, and Kathleen Wilson-Thompson, a former Walgreens Boots Alliance (WBA.O), opens new tab human resources chief, according to a regulatory filing.
Gebbia stepped down from the committee in March after its mandate was expanded from deciding on the redomestication to also considering what to do about Musk’s pay package, the filing states. His exit left behind a special committee of one, an unusual corporate governance setup that has been criticized by some of Tesla’s shareholders.
Gebbia left the special committee “out of an abundance of caution”, citing his personal relationship with Musk and a “potential business transaction” involving Samara that was “currently on hold”, according to the filing.
Gebbia told Reuters that the transaction the filing was referring to was about Musk potentially buying a house made by Samara.
“I did not want Elon’s status as a potential customer of Samara to be used against the committee, so I disclosed that I had put that potential business transaction on hold,” Gebbia said in a statement.
The special committee’s lawyers at Sidley Austin concluded that Gebbia’s ties to Musk did not constitute a conflict of interest that jeopardized Gebbia’s independence, according to the regulatory filing. Gebbia, however, chose to step down from the special committee regardless.
“I believed I was and am independent, but decided to step down because I did not want my relationship with Elon to be used to unfairly attack the committee,” Gebbia said in a statement to Reuters.
Tesla chair Robyn Denholm said in her own statement to Reuters that the board followed Delaware law in setting up the special committee, and that it was committed to strong corporate governance. “Whether and where to reincorporate was clearly a board decision, not a CEO decision,” Denholm said.
Musk and Wilson-Thompson could not be reached for comment.
The previously unreported details on the circumstances of Gebbia’s exit from the special committee shed new light on Tesla’s efforts to counter criticism that many of its directors are beholden to Musk.
