After a year in which Tesla CEO Elon Musk’s actions caused his board of directors to spring into action, four out of 11 directors will not stand for re-election when their terms are up. For a large cap company, that’s an unusually big group, though their departures will be staggered.
Their recent actions have included: finding someone to replace Mr. Musk as chairman; investigating an alleged physical altercation he had with an employee; responding to a civil fraud charge leveled against him by U.S. regulators; and finding out whether he was actually preparing to take Tesla private. And those are just the issues we know about.
Tesla’s board has faced criticism in the press and among critics for failing to rein in Mr. Musk. In at least one case, Mr. Musk reportedly has played hardball by threatening to quit the company in order to get a board discussion to go his way last year. Three of the departing directors have been on the board for about a decade and two of them are among Mr. Musk’s earliest financial backers, Antonio Gracias and Steve Jurvetson. Another, Linda Johnson Rice, is a former magazine publisher who joined the board two years ago. Mr. Jurvetson will officially leave next year. Mr. Gracias will leave next year or in 2021. The remaining directors include Mr. Musk’s brother Kimbal, Oracle CEO Larry Ellison, and Fox CEO James Murdoch.
Tesla, in a regulatory filing, said the move is aimed at “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.” OK then.