As Tesla Inc. discusses potential ramifications for Chief Executive Elon Musk’s actions with the Securities and Exchange Commission, it surprisingly disclosed a dramatic change to its board of directors and proposed corporate governance changes in a proxy delivered late on Good Friday.
In a proxy filing with the SEC, Tesla TSLA, +0.75% disclosed Friday afternoon that four independent directors will step down. Brad Buss and Linda Johnson Rice will not stand for re-election at the annual shareholders meeting, scheduled for June 11, while Stephen Jurvetson – who returned this month from a leave of absence from the board that began after allegations of misconduct at his venture-capital firm in 2017, according to the proxy — will remain until the 2020 meeting.
Antonio Gracias will also step down at the 2020 annual meeting, if Tesla shareholders approve a proposal at the annual meeting that reduces director terms to two years from three. Otherwise, he will leave in 2021.
The change in director terms is one of two Tesla proposals that would change its corporate governance. The other would get rid of a supermajority rule, which required more than two-thirds of shares vote to back certain changes to Tesla’s bylaws and rules.
Tesla’s board “determined that Tesla has established enough momentum, particularly through a very successful fiscal 2018, to set its course for the foreseeable future, establish credibility for its mission, and more effectively defend itself from opportunistic corporate raiders,” the proxy reads.
Tesla has added Oracle Corp. ORCL, +0.07% founder Larry Ellison and Kathleen Wilson-Thompson, a human-resources executive with Walgreens Boots Alliance Inc. WBA, -0.92% , to its board, and replaced Musk as chairman with board member Robyn Denholm. Those moves were part of a settlement with the SEC, which had threatened to seek the removal of Musk from his chief executive role as a result of tweets that suggested a go-private deal for Tesla had confirmed funding.
The SEC has already accused Musk and Tesla of not living up to its settlement by continuing to tweet potentially misleading material information about the electric-car company. A judge told the SEC and Tesla to hammer out a resolution to that accusation, and a hearing on the matter is scheduled to happen next week after a slight delay.
Tesla does not plan to replace any of the departing board members. The company will have a nine-member board after Buss and Rice step down, and would fall to seven after Jurvetson and Garcia depart. Those directors would be Elon Musk; his brother, Kimbal Musk; News Corp. executive James Murdoch; venture investor Ira Ehrenpreis; Ellison, Denholm and Wilson-Thompson.
A Tesla spokesman declined to comment beyond what was stated in the proxy Friday.
