Tesla revealed Friday that four directors will leave the company — shrinking the size of its board to seven eventually.
The electric-car maker said that it wants to “streamline” corporate oversight because its board has grown by four members over the past five years. That has led to “the duplication of certain areas of experience or expertise” among its directors, the company said in a filing. Now Tesla is shaking things up to allow the board to “operate more nimbly and efficiently.”
Two directors have agreed not to stand for reelection at Tesla’s annual meeting this year, and two more will leave in 2020 or 2021.
“Such agreements did not result from any disagreement between Tesla and any of such directors,” the company said.
Cautious Tesla investors have also been pleading for with the company to tighten oversight of CEO Elon Musk. The disclosure comes just four months after Tesla added two new board members as part of a settlement deal that Musk and Tesla reached with the federal Securities and Exchange Commission. The agency wanted Tesla to put stricter checks on Musk’s power after accusing him of misleading investors with his tweets about taking Tesla private. But their dispute is far from over: The SEC has since accused Musk of flouting other settlement terms and is looking to hold him in contempt.
Tesla’s Friday filings say the outgoing board members include Linda Johnson Rice, the chairman and CEO of Johnson Publishing, who joined the board in 2017. The others — Brad Buss, Antonio Gracias and Steve Jurvetson — have been with the company over nine years.
Jurvetson is considered a close ally to Musk. The venture capitalist was one of Tesla’s earliest investors, and he’s a director at Musk’s rocket company, SpaceX.
Jurvetson, who is scheduled to depart in 2020, returned to his role at Tesla this month after taking a year-long leave of absence that he began amid reports of inappropriate workplace behavior and harassment. Jurvetson has denied the allegations.
A new filing states that the Tesla board is confident that with three remaining independent members, it is “poised to lead Tesla with fresh perspectives balanced by deep historical knowledge of our company, while maintaining a wealth of diverse experience and expertise.”
Critics have said that some of Tesla’s “independent board members” aren’t so independent. Oracle’s Larry Ellison, for example, reportedly had close ties to Musk before joining the board. He was one of the members that Tesla brought on to comply with the SEC settlement.
Other independent directors include 21st Century Fox’s James Murdoch and Kathleen Wilson-Thompson, head of global human resources at Walgreens. Wilson-Thompson was the other independent director elected after the SEC settlement.
Kimbal Musk, Elon’s brother, also has a seat on the board.
If shareholders approve a plan to restructure the remaining board seats, director terms will be reduced to two years instead of three.
Chris Isidore contributed reporting.