Tesla to Shrink Board to 7 Directors From 11

Tesla said on Friday that four members of its eleven-member board would be leaving over the next two years, as the electric car company looks to streamline its board.

Brad Buss, Antonio Gracias, Stephen Jurvetson, and Linda Johnson Rice will not be standing for re-election in the upcoming annual meetings of stockholders in 2019 and 2020, the company said in a regulatory filing.

The company said its directors reviewed the composition of the board "focusing on a phased streamlining of the size of the Board to allow it to operate more nimbly and efficiently."

Tesla said the decision did not result from any disagreement between the company and the directors.

Of the four members who would exit the board, Buss and Gracias were part of Tesla's disclosure controls committee, overseeing the implementation of the terms of the consent agreement between Tesla and the SEC.

Buss was also the chief financial officer of solar panel installer SolarCity for two years before retiring in 2016. Tesla bought SolarCity that year.

Gracias has been an independent director at Tesla since 2010. Last May, proxy adviser ISS recommended that investors vote against his election to the board and called him a non-independent director.

Jurvetson, the co-founder of Silicon Valley venture capital firm Draper Fisher Jurvetson, is said to be on a leave of absence from Tesla's board since allegations of sexual harassment against him arose. Jurvetson has denied the allegations against him.

The proposed changes in the board come a couple of weeks after Elon Musk's position as the chief executive officer of Tesla was secured after a federal judge urged the billionaire to settle contempt allegations by the U.S. Securities and Exchange Commission over his use of Twitter.

Musk was sued by the SEC last year for tweeting that he had "funding secured" to take the company private. He settled the lawsuit, agreeing to step down as chairman and have the company's lawyers pre-approve written communications with material information about the company.

But he was again accused of violating that settlement by sending a tweet about Tesla's production that had not been vetted by the company's attorneys.

On Thursday, a federal judge ruled that Musk and the SEC would get another week to settle a dispute over Musk's use of Twitter.

© Thomson Reuters 2019