Tesla Inc. founder Elon Musk and the Securities and Exchange Commission reached an agreement on fraud charges that were filed on Thursday.
Musk gets to keep his job as CEO but must resign within 45 days as chairman for three years, according to a statement released by Saturday by the regulator.
He’ll also have to pay a $20 million fine and have Tesla appoint two new independent directors. Tesla will pay another $20 million. The SEC sued the billionaire for his explosive August tweet about a buyout of the electric-car company he founded.
Tesla (NASDAQ:TSLA) CEO Elon Musk has reached a settlement deal with the SEC that will keep him on as the company’s CEO and also require him to resign as chairman within 45 days, according to CNBC.
Musk will pay a $20M fine as part of the agreement over the fraud lawsuit filed by the SEC on Thursday.
Sources indicate that as part of the deal, Tesla will appoint two new independent directors to the board. The EV automaker has been criticized in the past for the composition of the board.
Updated: The SEC has posted a press release on the settlement, including details on an agreement with the company itself. Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications. Tesla will also pay a $20M fine.
“The total package of remedies and relief announced today are specifically designed to address the misconduct at issue by strengthening Tesla’s corporate governance and oversight in order to protect investors,” notes SEC Enforcement co-director Stephanie Avakian.
