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Tesla to Shrink Board of Directors by Four People



Tesla said two directors plan to leave its board in June and two more intend to depart next year as part of a move to improve corporate governance of the electric car company.

Brad Buss, a member of the board since 2009, and Linda Johnson Rice, who joined two years ago, have asked not to be re-elected when shareholders convene on June 11 for Tesla’s annual general meeting, the company said in a preliminary proxy statement.

Steve Jurvetson, who just returned from an extended leave of absence, will not seek re-election at the 2020 shareholders’ meeting, the proxy said; Antonio Gracias, a close associate of the chief executive, Elon Musk, intends to leave at the same time, a year before his term ends. Mr. Gracias’s early departure must be approved by shareholders at the June 11 meeting.

The departures will reduce the number of directors to seven from 11.

Shrinking the board will “allow it to operate more nimbly and efficiently,” the company said.

Next week, Tesla is expected to report a loss in the first quarter, when deliveries fell 31 percent compared with the fourth quarter of 2018. Analysts will look closely at how much cash the company has on hand. It had $3.7 billion at the end of 2018, but it paid nearly $1 billion to bondholders in March. It recently said it had “sufficient” cash.

Tesla is currently valued at $47 billion, more than Ford, but it has yet to turn an annual profit since its founding in 2003.

Tesla’s board has come under criticism for directors’ close ties to Mr. Musk. Mr. Gracias and Mr. Jurvetson are also directors of SpaceX, Mr. Musk’s rocket company. Mr. Jurvetson had been on leave since late 2017 after he resigned from his venture-capital firm amid allegations of misconduct. He had denied those allegations.

Mr. Buss had for a time served as chief financial officer of SolarCity, the struggling solar-panel maker where Mr. Musk had served as chairman until Tesla acquired the company in 2016. Two other directors are Kimbal Musk, Mr. Musk’s brother and founder of a chain of restaurants, and Ira Ehrenpreis, a SpaceX investor.

Mr. Musk stepped down as chairman last year as part of an agreement to settle a securities-fraud lawsuit brought by the Securities and Exchange Commission. He was replaced by Robyn Denholm, who was then a senior executive at an Australian telecommunications company.

Tesla’s board is one of the most highly compensated among publicly traded companies. The proxy statement said the 10 directors other than Mr. Musk were given stock options valued at more than $60 million in 2018.

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