On Friday evening, Tesla announced that 4 board members are going to leave at the end of their terms this year and in 2020.
With the release of Tesla’s preliminary proxy statement for its upcoming shareholders meeting, the automaker made the announcement that board members Brad Buss, Antonio Gracias, Stephen Jurvetson, and Linda Johnson Rice will all not stand for re-election at the end of their current terms.
Tesla says that the goal is to implement “a phased streamlining of the size of the Board to allow it to operate more nimbly and efficiently, while maintaining new ideas, expertise and experiences on the Board.”
They describe the “phased streamlining” in a filing:
“As a result, on April 18, 2019, each of Brad Buss, Antonio Gracias, Stephen Jurvetson, and Linda Johnson Rice agreed collectively with the Board and its Nominating and Corporate Governance Committee that each of them will not stand for re-election to the Board at the expiration of their respective current terms, which will be at the 2019 annual meeting of stockholders for Mr. Buss and Ms. Rice, at the 2020 annual meeting of stockholders for Mr. Jurvetson and, if our stockholders approve a director term reduction proposal as described in the Preliminary Proxy Statement, for Mr. Gracias. If our stockholders do not approve such proposal, Mr. Gracias’ term will end at the 2021 annual meeting of stockholders. Such agreements did not result from any disagreement between Tesla and any of such directors.”
The board members haven’t commented on the announcement.
Here’s Tesla’s preliminary proxy statement:
[scribd id=406855656 key=key-IJfz94FUqWkYm81zjwub mode=scroll]
This is an interesting move to interpret. When a company is losing 30% of its board, it’s generally bad news.
We could take it at face value since the board grew so much over the last 18 months that it would make sense to streamline it a little.
But then we have to take into account who those board members are and their relations to Tesla and Elon Musk.
Antonio Gracias and Stephen Jurvetson are longtime friends of Elon and investors in his companies.
The latter went on leave after allegations of misconduct at his VC firm came out last year, but he is now back from leave this month after the filing.
Jurvetson is a long time supporter of Tesla’s mission and Elon’s vision at both Tesla and SpaceX. He was definitely an ally of Elon on the board.
Gracias and Buss have similar stories.
Linda Johnson Rice is a different story. She was nominated to the board when Tesla was under pressure to bring more independent board members.
But she is the exception. For the most part, it looks like Elon is losing strong allies on the board.
So what’s happening? Did they want to leave? Is Elon losing control of the board? Is it simple streamlining?
I honestly don’t know. What do you think? Let us know in the comment section below.
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