WASHINGTON (AP) — The Latest on Elon Musk’s settlement with U.S. regulators to remain at the company (all times local):
Shares in Tesla are surging in premarket trading after founder Elon Musk reached a settlement with the Securities and Exchange Commission that will keep him at the company as CEO.
The price of Tesla shares was up 16 percent in electronic trading a couple hours before the stock market was due to open Monday. On Friday, it had plunged 13.9 percent to close at $264.77 a share.
Under the settlement announced Saturday, Musk is giving up the chairman’s role but gets to remain as CEO. The complaint had sought his removal as chief executive as well.
The deal will also put two new, independent members on the board. Legal experts and many investors believe that could provide more oversight, an important move for a company of Tesla’s size.
Whoever becomes the new chairman of Tesla Motors will face the formidable task of reining in Elon Musk, the charismatic, visionary chief executive with an impulsive streak, while also helping Musk achieve his dream of turning Tesla into a profitable, mass-market producer of environmentally-friendly electric cars.
Musk is giving up the chairman’s role under a settlement announced Saturday with the Securities and Exchange Commission. Besides a new chairman, Tesla was also ordered to appoint two new, independent members to its board. A more assertive board could provide the kind of tighter oversight that many legal experts, and Tesla investors, say is overdue for a company of Tesla’s market value.
The settlement stemmed from a lawsuit the SEC filed charging Musk with misleading investors in August with a tweet that said he had “funding secured” for taking the company private.