The advisory firm Glass Lewis says it is concerned by the venture capitalist’s “fairly extraordinary” leave of absence.
Tesla is facing new pressure to do something about its unwillingness to remove or permanently reinstate Steve Jurvetson on its board of directors, with one of the leading proxy advisory firms saying on Monday that it was bothered by his “fairly extraordinary” leave of absence.
Jurvetson is not up for reelection to the board of directors, but the venture capitalist is in the middle of a building controversy over the independence of the car company’s board, which some say is too closely aligned with Elon Musk, its CEO. Jurvetson is technically an independent member of the board, but he is close personal friends with Musk, who has yet to say whether Jurvetson will remain on his board of directors after Jurvetson was ousted from his venture capital firm amid an investigation into sexual misconduct.
Instead, Jurvetson has remained “on leave” for six months. That doesn’t sit well with at least two shareholder adviser groups.
“We are concerned by the fairly extraordinary length of Mr. Jurvetson’s leave of absence,” Glass Lewis said in its proxy paper in advance of next month’s Tesla’s shareholder meeting. “The board has provided no assurances as to when he might resume his service. Directors have a fundamental responsibility to represent shareholders at board meetings; while Mr. Jurvetson is entitled to devote time to his personal matters, we do not believe this should come into conflict with the need of Company shareholders for board representation.”
Glass Lewis says that the disappearance of an independent director — without replacement — is “doubly concerning” because of their existing worries about how well the board can check its CEO. They’re calling for shareholders to vote against Antonio Gracias, a private equity investor who is up for relection:
“We believe it is reasonable for shareholders to hold Mr. Gracias to account for the lapse in good governance embodied by Mr. Jurvetson’s extended absence.”
Glass Lewis is one of the two most prominent proxy advisory firms, alongside ISS, which has declined to comment on whether Jurvetson should be removed from the board or whether Musk should make a final decision.
Tesla hasn’t commented beyond its initial statement last November that Jurvetson would be on leave from the boards of Tesla and SpaceX, a Musk-helmed private company, “pending resolution of these allegations.” Earlier this year, Jurvetson’s venture capital firm, DFJ, completed its investigation into the allegations, sources have told Recode, but Tesla has declined to offer any update.
Tesla and Jurvetson both declined to comment Tuesday. Tesla’s most recent proxy statement, released last month, didn’t address his standing.
The board drama comes amid a slew of executive departures at Tesla and as Musk restructures his executive team. Some want to see a stronger board intervene given the troubles, with one shareholder trying to remove Musk from the role of board chairman, and others agitating to remove Musk’s brother, Kimball, from the panel.
Glass Lewis’ comment comes after CtW Investment Group — a union-aligned activist firm that advises pension funds that hold Tesla shares — said last week that Jurvetson’s limbo status reflected the company’s unwillingness to revamp its board.
“The board’s failure to insist that Steve Jurvetson — whose own venture capital firm dismissed him following sexual harassment claims — resign rather than take a leave of absence signals an extraordinary unwillingness to accept the need to change,” CtW said in its letter to shareholders filed with the Securities and Exchange Commission.
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