Tesla Inc. (TSLA) is adding two new executives from major media corporations to its board of directors after investors urged the electric carmaker to add members without close ties to CEO Elon Musk.
James Rupert Murdoch, the CEO of Twenty-First Century Fox Inc. (FOXA) , and Linda Johnson Rice, the chairman of Johnson Publishing Co., will join Tesla's board, according to a company blog post.
Though the new board members are indeed independent, according to BoardEx, a relationship mapping service of TheStreet Inc., they lack experience in the industrial realm and have loose ties to the technology industry at best.
Murdoch is the son of Fox Co-Chairman Rupert Murdoch. He is also the Chairman of the board at Sky plc (SKYAY) ; and, he also serves as a director at News Corp. (NWSA) , where his father is Co-Chairman, according to BoardEx, a relationship mapping service of TheStreet.
Rice has chaired the publisher of Ebony and Jet magazines since 2010. Additionally, she is a director at online food ordering company Grubhub Inc. (GRUB) as well as marketing and communications holding company Omnicom Group Inc. (OMC) , per BoardEx.
Rice and Murdoch join the board after the California State Teachers' Retirement System (CalSTRS) and four other Tesla investors penned a letter in April to Antonio Gracias, Tesla's lead independent director, calling for more independent members.
"Directors should be held to a higher standard of independence given the conflicts of interest that permeate this board," the April letter said. "A thoroughly independent board would provide a critical check on possible dysfunctional group dynamics, such as groupthink."
Last month, Tesla was dealt a large blow after a large minority of investors urged the electric car maker to have annual elections for its directors, a major rebuke to Musk and one that likely contributed to the company's move to bring in two new directors. About 47% of the votes not controlled by directors and officers backed a shareholder proposal on the subject. Musk himself owns a 22% stake.
Activist investors and governance experts prefer annual director elections, in part because they contend that board members should be accountable to investors on an annual basis. The big vote suggests that a large group of outside shareholders weren't happy with the makeup of the board.
It's unclear whether the move will appease disgruntled investors. A group of pension funds have urged Tesla in recent months to add more independent directors. The funds had raised concerns that the company's board is made up of too many directors overly tied to Musk.
However, Tesla expanded its board size to nine from seven to add the two new directors. As a result, it is unlikely to appease investors who would have preferred to have some incumbent directors removed.
Tesla shares were relatively unchanged in after-hours trading on Monday.
-- Ronald Orol and Anders Keitz contributed to this report.
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This article was originally published at 5:13 pm ET and has been updated with additional background of new board members.