SAN FRANCISCO • Tesla Inc will bid farewell to longtime directors and reduce the size of its 11-member board to nine as the automaker ushers in a new era of corporate governance.
Director terms will be cut to two years from three, allowing shareholders to vote on the board’s performance with greater frequency, according to a proxy filed last Friday.
Directors Brad Buss, former CFO of Solarcity Corp, and Linda Johnson Rice, CEO of Johnson Publishing Co Inc, won’t seek re-election when their terms expire at the June 11 annual shareholder meeting.
If shareholders vote to reduce director terms to two years, venture capitalist Stephen Jurvetson — who returned from an extended leave of absence this month — has indicated he would not seek re-election in 2020.
Antonio Gracias, a private equity firm founder, has also indicated he wouldn’t stay on Tesla’s board after his term ends next year.
Buss, Gracias and Jurvetson have long been associated with Tesla CEO Elon Musk. Gracias and Jurvetson are both on the board of the billionaire’s closely held Space Exploration Technologies Corp.
“It strikes me as an important step towards more effective corporate governance,” said Stephen Diamond, an associate professor of law at Santa Clara University. “Maybe this will bring some fresh air and light into the board.” — Bloomberg