Tesla Slashes Board Size to Seven Amid SEC Settlement Demands
Tesla reduces its board of directors by more than a third to just seven members as part of an ongoing effort to increase independence following last year's SEC settlement.
Tesla slashes its board of directors by more than one-third, bringing the total down to just seven members by 2020. This reduction includes the departure of longtime board member Brad Buss, independent director Linda Johnson Rice, venture capitalist Steve Jurvetson, and Antonio Gracias. The company states in a recent proxy filing that it does not plan to fill the empty seats left by these departing members.
This significant restructuring serves as the latest move by Tesla to gain more independence and comply with last year's settlement with the U.S. Securities and Exchange Commission. As part of that agreement, Tesla promises to add two independent directors and requires Elon Musk to step down as chairman for three years. The company fulfills the first part of this requirement in December by appointing Oracle founder Larry Ellison and Walgreens executive Kathleen Wilson-Thompson to the board.
These governance changes arrive just days before a critical week for the automaker, which includes an autonomous vehicle event on April 22, a quarterly earnings call on April 24, and a court hearing regarding Musk's Twitter activity. The original SEC dispute stems from an infamous tweet where Musk claims he has "funding secured" to take the company private at $420 per share, leading to a $20 million fine and strict new oversight rules for the CEO's public communications.