Tesla has added Hiromichi Mizuno to the Board of Directors and Audit Committee as a new member – the former chief investment officer of the Japanese $ 1.5 trillion pension fund and longstanding opponent of common market practices such as short sales.
With the appointment of Mizuno, the Tesla board now has 10 members, including Oracle founder, chair and CTO Larry Ellison and Walgreens managing director Kathleen Wilson-Thompson. Mizuno will also sit on the Board's Audit Committee.
Mizuno has a long career in finance and investment, including serving as the Executive Managing Director and Chief Investment Officer of the Japanese Government Pension Investment Fund (GPIF), the largest in the world with approximately $ 1.5 trillion in assets under management. Mizuno left his position in late March.
During his time at GPIF, Mizuno promoted environmental, social and governance practices. He was also known for challenging short sales – a practice that plagued Tesla and its CEO Elon Musk . During his tenure, the GPIF suspended lending, which surprised many. Mizuno's opposition to short sales is at odds with some market purists who believe that the investment strategy – speculating on the decline in a stock – actually offers greater price transparency. Mizuno said in previous interviews with media like the Financial Times that this contradicts his long-term perspective.
Mizuno is a member of a number of government advisory boards, including the PRI Board of Directors, the Global Future Council of the World Economic Forum and the integrated advisory board of the Japanese government's strategic fund.
He also challenged many established market practices, including short sales, to promote long-term value creation for companies.
As a member of the Board of Directors, Mizuno will receive an initial allotment of an option to purchase 2,778 Tesla common shares that will vest on June 18, 2020. For his work on the Audit Committee, he receives an initial allotment of an option to purchase 4,000 shares of Tesla common stock, which can be exercised in 12 equal monthly tranches and are still in service on each exercise date, according to a regulatory authority submitted on Thursday.
Tesla's board of directors had remained unchanged for years until Ellison and Wilson-Thompson joined the board in late 2018 as independent directors as part of a settlement with the U.S. securities regulators about CEO Elon Musk's infamous tweets about the company's privatization. As part of the settlement, Tesla agreed to add two independent directors, and Musk would step down as chairman for three years. Robyn Denholm, former chief operations officer of Telstra Corporation Limited, a telecommunications company, was appointed chairman in November 2018.
In April 2019, the company announced that it would cut its executive board by more than a third to seven directors by 2020. This included the loss of some of Musk's early advisors and allies.
Long-time board members Brad Buss and Linda Johnson Rice, who joined as independent directors two years ago, did not request reelection in 2019 and their terms expired at the company's annual general meeting in June. The board said in the power of attorney at the time that it did not intend to occupy its seats.
Antonio Gracias, whose term ends in 2020, and venture capitalist Steve Jurvetson will leave the board in 2020.