Tesla Inc. over the weekend announced the departure of four members of its Board of Directors -- three of whom are close friends of CEO Elon Musk -- in a "phased streamlining" of the 11-person board.
The four board members who will leave over the next two years are Brad Buss, Antonio Gracias, Stephen Jurvetson, and Linda Johnson Rice. They will not be standing for re-election at the upcoming annual meetings of stockholders this year and in 2020, said Tesla in a filing with the U.S. Securities and Exchange Commission (SEC).
Tesla said the board reviewed its composition "focusing on a phased streamlining of the size of the Board to allow it to operate more nimbly and efficiently."
Tesla took pains to state the decision to part with four board members did not result from any disagreement between the company and these four people. Buss, Gracias, and Jurvetson are all personal friends of Trump and investors in Tesla.
On the other hand, Rice was nominated to the board when Tesla was under pressure to appoint more independent board members.
Buss and Gracias are members of Tesla's disclosure controls committee that ensures the implementation of the terms of the consent agreement between Tesla and the SEC. Jurvetson is on a leave of absence from Tesla's board since allegations of sexual harassment against him arose. Jurvetson denies the allegations.
The proposed changes to the board come to a couple of weeks after Musk's position as Tesla CEO was secured after a federal judge urged the billionaire to settle contempt allegations by the SEC over his use of Twitter. On Thursday, the judge ruled that Musk and the SEC will get another week to settle a dispute over Musk's use of Twitter.
According to a statement from the board, Buss, Gracias, Jurvetson, and 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."
