11/6/25 – Issue 10.44 – Your weekly news on all things board. 

The price of success? This week the Tesla board awaits the answer to its $878 million question: Will shareholders approve its unprecedented compensation package for Elon Musk, which would stake the company’s future on a single leader with immense influence, and significant conflicts? One of the carmaker’s largest investors has already said no, underscoring growing concerns about concentrated power and key person risk. Meanwhile, new data shows board refreshment slowing to a nine-year low, with incoming directors trending older as companies favor experience in a volatile climate. Victoria’s Secret faces an activist’s call for board leadership change. Kenvue has agreed to a $40 billion sale to Kimberly-Clark. Denny’s goes private. In Washington, SEC Chair Paul Atkins is pushing to revive the IPO market by reducing regulatory hurdles, though his approach has sparked concern. Responding to a survey of global CEOs which found that 94% say AI could outperform at least one director on their board, researchers unveil a thoughtful experiment that demonstrates how much could be gained, as well as lost, by relying on bots in the boardroom. 

In the Spotlight

Tesla Board to Shareholders: Pay Musk or Else

Board signals Musk may step down if historic pay package fails to pass

“Tesla's board of directors has pushed in all its chips on Elon Musk. Now investors must decide whether to back the biggest bet in company history. Shareholders will vote Thursday on the stark choice presented by the board: pay Musk up to $878 billion in company stock or take the risk he will leave – potentially driving down the company’s stock…. The board and many investors argue that only Musk can deliver on his promises to transform Tesla into an artificial-intelligence juggernaut delivering millions of self-driving robotaxis and humanoid robots…. Other major shareholders and executive-pay experts warn that the proposal represents an enormous risk to investors. The package, experts said, flouts governance principles not only because of its size but because the board is so explicitly staking Tesla’s future on one leader, with myriad conflicts of interest, who stands to consolidate unchecked power over the company. Responsible governance, they argue, requires boards to remain open to a competitive market for the best available CEO at any given time.” REUTERS

Tesla Is Obsessed with Musk’s Pay Package. Musk Is Obsessed With AI.

CEO’s focus on winning tech arms race leads to long hours at xAI and questions about how much attention he pays to Tesla

“When Elon Musk left DOGE in May, Tesla investors hoped its longtime leader would hurry back to headquarters to focus on reversing a sales slump and recharging the company. For much of the summer, though, … Musk was holed up at his newest startup, xAI, trying to catch up in the artificial-intelligence arms race… At one point, Musk was spending so much time at xAI that he began holding meetings there with Tesla employees…. In recent weeks, some major Tesla investors have privately pressed top executives and board members about how much attention Musk was actually paying to the company and about whether there is a CEO succession plan. An unusually large contingent of Tesla board members, including chair Robyn Denholm, … met with big investors in New York last week to advocate for Musk’s proposed new pay package.… [They] acknowledged they can’t force Musk to work for the EV maker full time, and they have said his focus on AI will ultimately benefit Tesla, which is developing several technologies that will use it.” WALL STREET JOURNAL

Norway Says No: Top Tesla Investor Shuns Musk’s Mega Payout

First major institutional “no” vote ahead of Tesla’s high-stakes shareholder meeting

“Norway’s sovereign-wealth fund rejected Tesla Chief Executive Elon Musk’s new $1 trillion pay package, becoming the first major investor to disclose its decision…. ‘While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk—consistent with our views on executive compensation,’ it said in a statement…. On Thursday, Tesla will host its annual shareholder meeting and announce the results of voting on several proposals including Musk’s compensation package…. Shareholders will also vote on the re-election of board members and a shareholder proposal that asks Tesla’s board to invest in Musk’s artificial intelligence startup, xAI.” WALL STREET JOURNAL

From Boardspan this Week

What CEOs Really Want from Their Boards

We asked CEOs for their views on what makes for an effective board. Here are the 5 things at the top of every CEO's list

"Every board member has wondered at some point: Am I adding the kind of value my CEO truly needs? Earlier this year we asked board chairs and other leaders about governing in this challenging environment and how directors might focus their efforts to be most effective. Valuable as those perspectives are, they’re only one side of the coin. To present a holistic view, over the last several months we asked CEOs for their views on what makes for an effective board.  The responses of the many business leaders we spoke with painted a consistent picture. CEOs appreciate altitude, not interference. They value strategy over scrutiny, debate without ego, and alignment that inspires confidence both inside the company and with outside stakeholders." BOARDSPAN

Across the Board

Fewer New Directors, More Familiar Faces: Board Turnover Hits 9-Year Low

This year S&P 500 boards have appointed just 374 new independent directors, the lowest in nearly a decade, while demand shifts to leadership veterans

“In a complex business environment, board composition continues to evolve…. [A] Spencer Stuart study found that only 22% of CEOs report receiving effective board support to navigate today’s challenges…. Boards are recalibrating their composition, prioritizing directors with experience — seasoned leaders able to serve as strategic partners to management. And this year’s incoming class reflects this shift; as a whole, they are older, most likely to be retired and to have served on a public board previously, and more likely to have a background as a CEO or financial executive…. New appointees this year skew older....” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

Victoria’s Secret Faces Boardroom Battle as Top Investor Pushes for Overhaul

Activist momentum grows as BBRC targets Victoria’s Secret board leadership in pursuit of transformation

“One of Victoria’s Secret’s largest shareholders is turning up the pressure on the struggling lingerie retailer, seeking a shake-up of the board. BBRC International, which owns a nearly 13% stake in Victoria’s Secret, delivered a letter to the Victoria’s Secret’s board of directors this week calling for the removal of Chair Donna James and asking for a board seat. The private investment firm, run by the Australian billionaire Brett Blundy, started building a stake in Victoria’s Secret in 2022 and has been privately urging changes since last year…. BBRC is pushing for Blundy to be added to Victoria’s Secret’s board, citing his background in the retail sector …. The company has faced pressure from investors over the past year to turn things around. In June, activist investor Barington Capital Group said it had built a stake and was pushing for a board refresh.” WALL STREET JOURNAL

Kimberly-Clark Agrees to Buy Kenvue, Maker of Tylenol, for $40 Billion
The $40 billion deal brings together household staples and a company defending Tylenol’s safety from political controversy

"Kimberly-Clark, the consumer products giant that owns Kleenex and Huggies, said on Monday that it agreed to spend about $40 billion to acquire Kenvue, the embattled maker of Tylenol, which has fought unproven claims by the Trump administration that link the common pain reliever to autism…. Kenvue was spun off by Johnson & Johnson in 2023 to run the group’s consumer products division. Johnson & Johnson kept the more profitable, faster-growing businesses in pharmaceuticals and medical devices. Kenvue has struggled to find its footing as a stand-alone company, and the activist investment firm Starboard bought a stake in the company and pushed for change. In March, the chief executive of Starboard, Jeffrey Smith, took a seat on Kenvue’s board of directors. In July, Kenvue announced the departure of its chief executive alongside a review of the company’s strategy.” NEW YORK TIMES

Denny’s Goes Private After 72 Years, Closing Low-Performing Stores
Privatization deal follows a broader restructuring effort aimed at streamlining operations

“Denny's, the breakfast chain known for classic diner food and its Grand Slam Breakfast, is going private in a $620 million deal orchestrated by a group of investors. The deal, announced Monday, values the chain at $620 million, including debt. The investors purchasing the company are private equity investment company TriArtisan Capital Advisors, investment firm Treville Capital and Denny's franchisee Yadav Enterprises…. Denny's reached out to more than 40 potential buyers and received multiple offers, Denny's CEO Kelli Valade said in a statement. Valade said Denny's board believed the deal announced Monday was in the best interest of shareholders and the best path forward for the company.” CBS

Can Paul Atkins ‘Make I.P.O.s Great Again’?

SEC Chair Paul Atkins wants to remove red tape and boost IPO activity, critics argue he's missing deeper market dynamics

“The number of U.S. public listings dropped from a peak of 8,090 in 1996 to 4,010 last year, according to data from the World Bank. Fewer companies are filing for I.P.O.s, and more public companies are being taken private. That’s a problem for those who consider public markets to be a critical economic engine. And Paul Atkins, the Trump-appointed chairman of the Securities and Exchange Commission, has vowed to ‘make I.P.O.s great again.’…. The chair blames onerous regulation and legal challenges for most of the listings decline…. Critics say regulating private markets is just as important. At the same time Atkins is pushing for public-sector deregulation, he is supporting private-sector deregulation, such as allowing private equity and other alternative assets to enter retirement savings accounts.” NEW YORK TIMES

Can AI Boards Outperform Human Ones?

LLMs are capable of delivering informed, data-rich advice, often beyond what overextended, part-time directors can provide

“According to a recent poll of 500 global CEOs, 94% believe AI could offer better counsel than at least one of their human board members…. Unsurprisingly, a growing chorus of researchers and practitioners has been advocating for integration of generative AI intro corporate boards—even creating applications to support that vision. As this trend gains traction, unavoidable questions arise: Will board deliverations become obsolete? Will chatbots eventually deliver decisions as good –or better—than humans? To move beyond speculation, the Mack Institute for Innovation Management at Wharton and the Center for Corporate Governance at INSEAD designed an experiment to directly compare AI and human boards.…. When you combine these findings with CEOs’ skepticism of the value that boards bring to strategic decisions, it becomes abundantly clear that corporate governance needs to adopt AI. The companies that resist embracing it at the board level will almost certainly be outcompeted by the companies that don’t.” HARVARD BUSINESS REVIEW

Seat at the Table

• Digital infrastructure firm Equinix welcomes to its board Rebecca Kujawa, former President & CEO of NextEra Energy Resources

• Customer platform HubSpot welcomes to its board Clara Shih, former CEO of Salesforce AI

• Stanley Black & Decker announces to its board Mary Laschinger, former Chair and CEO of packaging firm Veritiv

• Ball Corporation elects to its board John Panichella, CEO of water solutions firm Solenis

• Residential brokerage Douglas Elliman adds to its board Perry Wetiz, Founding Partner of Weitz & Luxenberg P.C.

• IT firm Qualys names to its board Bradford Brooks, former CEO of internet security firm Censys

• Marker Therapeutics elects to its board Kathryn Corzo, former President and COO at biotech firm bit.bio Ltd

• First American Financial appoints to its board Jeffrey Dailey, former CEO of Farmers Group

About Boardspan
Boardspan helps boards raise the bar on their critical governance mandates by combining cutting edge digital capabilities with high-touch consulting services. They are leaders in board assessments, individual director & CEO evaluations, board succession strategy & search, skills & composition analyses, and bespoke advisory work. Boardspan’s focus is entirely on boards, delivering deep experience, objectivity, an analytical orientation, and insight-driven recommendations. Boardspan works with public, private and non-profit organizations across all verticals including consumer, healthcare, financial services, technology, industrials and non-profit. Specific clients include Archer Daniels Midland, Autodesk, Blue Shield (CA), Boston Beer Company, Colgate-Palmolive, e.l.f. Beauty, HubSpot, Ingersoll Rand, KKR, Lam Research, the PGA, Roblox, Salesforce, the USOPC, and scores more.