Musk Says He Must Approve All Tesla Hires

Elon Musk has told managers at Tesla that all new hires must be cleared directly through him, as he turns his attention from Twitter to the electric car firm.

The memo to Tesla staff on Monday, reported by several news outlets, comes shortly after Musk announced the appointment of NBCUniversal advertising head Linda Yaccarino as chief executive of Twitter.

In the email Musk told Tesla managers to send him a weekly list of all proposed hires, including contractors, and to “think carefully” before making any proposal, reports said.

Musk has issued similar rules in the past, with staff telling the Information that the practice has been similar in effect to a hiring freeze.

Hiring approval

“No one can join Tesla, even as a contractor, until you receive my email approval,” Musk reportedly wrote.

In April Tesla posted its lowest quarterly gross margins in two years, missing market estimates after it slashed prices aggressively in the US, China and other markets to improve demand and reduce inventories.

Musk has been under pressure to turn more of his attention to Tesla after months of hands-on daily decision-making at Twitter, which he bought last October for $44 billion (£35bn).

Also on Monday a US federal appeals court rejected Musk’s plea to modify or end a 2018 settlement with the Securities and Exchange Commission (SEC) that obliges him to receive advance approvals for some tweets from a Tesla lawyer.

‘Muzzle’

Musk had argued that the requirement amounted to a “government-imposed muzzle” that violated his rights to free speech.

He agreed to the reviews in 2018 in order to settle a FTC probe into his tweets related to a plan to take Tesla private. The plan never materialised and shareholders and the SEC argued Musk’s tweets altered share prices and caused some shareholders to lose money.

Under the settlement Musk and Tesla also paid $20m each in civil fines and Musk gave up his role as Tesla chairman.

On Monday a three-judge panel of the second US circuit court of appeals affirmed a lower court’s decision not to revoke the deal, noting that Musk’s tweets have continued to raise controversies even with the reviews in place.

‘Has now changed his mind’

The court said Musk had agreed to the settlement and had no grounds to void it now “because he has now changed his mind”.

“Had Musk wished to preserve his right to tweet without even limited internal oversight concerning certain Tesla-related topics, he had the right to litigate … or to negotiate a different agreement – but he chose not to do so,” the panel wrote in its ruling.

Nor would revoking the deal have no public interest value, the court added.

“If anything, it cuts in the other direction, given the importance of the public’s interest in the enforcement of federal securities laws,” the panel wrote.