Four members of Tesla Inc.’s 11-person board will not seek re-election, the transportation company’s general counsel has announced in a filing with the U.S. Securities and Exchange Commission.
In the 8-K filing, GC Jonathan Chang wrote Tesla is “streamlining” its board size, with board members Brad Buss, Antonio Gracias, Stephen Jurvetson, and Linda Johnson Rice agreeing “collectively with the Board and its Nominating and Corporate Governance Committee” that they would not seek re-election at the end of their current terms. The decision “did not result from any disagreement,” Chang wrote in the 8-K.
Tesla’s preliminary proxy filing, also submitted Friday, claimed the board’s “significant increase” from seven directors to 11 over the past five years led to a ”duplication of certain areas of experience.” Following Buss and Rice’s terms in 2019, the number of authorized board members will shrink to nine, a number the board “expects to further reduce.”
The Palo Alto, California-based company’s board has seen a series of shakeups over the past year, most recently in December with the SEC-mandated addition of two independent members, Oracle Corp. co-founder Larry Ellison and Kathleen Wilson, the executive vice president and global chief human resources officer of Walgreens Boots Alliance Inc. Both Ellison and Wilson will remain on the board.
“The Board is confident that with three continuing independent Board members—Lawrence J. Ellison, James Murdoch and Kathleen Wilson-Thompson—who joined Tesla within the past two years, the Board remains poised to lead Tesla with fresh perspectives balanced by deep historical knowledge of our company, while maintaining a wealth of diverse experience and expertise,” Tesla’s pre-proxy stated.
In November, Telstra Corp. Ltd. chief operations officer Robyn Denholm replaced Tesla chief executive officer Elon Musk as board chair, part of the company’s same October SEC settlement. Tesla’s SEC troubles were spurred by an Aug. 7 tweet from Musk inaccurately claiming he’d secured funding to take the company private at $420 a share.
There have also been changes at the executive and management levels, especially in the legal department. Tesla’s top securities lawyer departed for a general counsel role at hospitality startup Sonder in November.
Longtime Tesla lawyer Chang took the general counsel role in February when predecessor Dane Butswinkas left after two months at the company. Butswinkas, who returned to his old firm Williams & Connolly, departed shortly after Musk again clashed with the SEC over tweets.
Musk tweeted Feb. 19 that Tesla would produce around 500,000 cars in 2019, later clarifying that “deliveries for year still estimated to be about 400k.” The SEC then called on Musk to be held in contempt of court.
U.S. District Judge Alison Nathan told the SEC and Musk in a hearing this month over the tweets to “put your reasonableness pants on, and work this out,” Reuters reported. Both sides now have until the beginning of May to end their dispute.