Elon Musk's Potential 'Business Transaction' With Tesla Director Raises Concerns on Independence of Board's 'Special Committee'

By Jace Dela Cruz

Jun 04, 2024 10:51 AM EDT

Joe Gebbia, a Tesla director, revealed that he was considering selling a house from his start-up, Samara, to Tesla CEO Elon Musk, according to Reuters.

Tesla Former Director Reveals Discussing Selling House to Elon Musk

Joe Gebbia, who co-founded Airbnb and Samara that makes tiny prefabricated houses, was part of a special committee deciding whether Tesla should move its corporate domicile from Delaware to Texas. 

This committee was formed after a Delaware court dismissed Elon Musk's $56 billion pay package and Musk proposal to relocate Tesla's corporate base.

READ NEXT: Tesla Defends Musk's $56 Billion Pay Package Following 'Excessive' Remarks from Shareholders

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LONDON, ENGLAND - NOVEMBER 2: Tesla and SpaceX's CEO Elon Musk laughs during an in-conversation event with British Prime Minister Rishi Sunak (not pictured) at Lancaster House on November 2, 2023 in London, England.
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Why Joe Gebbia Left Tesla Committee

Joe Gebbia left the special committee in March, when its responsibilities expanded from deciding on the redefinition to considering Elon Musk's pay package.

According to a regulatory filing, Gebbia decided to leave the committee "out of an abundance of caution." He cited his personal relationship with the Tesla CEO and a "potential business transaction" involving his company as reasons for his departure. 

Gebbia told Reuters that the "transaction" mentioned in the filing was about Musk possibly purchasing a house built 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 told the outlet.

Despite legal advice indicating that Gebbia's relationship with Musk did not pose a conflict, he still left the committee to prevent any challenges to its independence.

Tesla chair Robyn Denholm also told Reuters that the board followed Delaware law in establishing the special committee and that whether and where to reincorporate was not a CEO decision but of the board.

READ MORE: Tesla CEO Elon Musk Faces Insider Trading Allegations After $7.5 Billion Share Sale 

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