It has been five months since Tesla and SpaceX placed board member Steve Jurvetson on leave, and Elon Musk’s companies have still not said whether or not he will remain on their boards of directors.
Elon Musk still hasn’t decided what to do with board member Steve Jurvetson after allegations of misconduct
The venture capitalist sits in limbo even though DFJ’s investigation has concluded.
Asa Mathat
After the venture capitalist was ousted from his firm, DFJ, in November following questions about his personal conduct, Tesla and SpaceX said Jurvetson would take a leave of absence from both boards “pending resolution of these allegations,” according to a statement at the time.
But now DFJ’s investigation has concluded, according to people familiar with the process, and Musk, who counts Jurvetson as a close friend, still hasn’t offered a decision.
Representatives for Tesla and SpaceX have been declining to comment beyond their original statement. Jurvetson and DFJ declined to comment for this story.
Jurvetson was the target of a DFJ investigation into his personal conduct last fall. The company found, in part, a pattern of dishonesty with women, sources told Recode at the time, including extramarital affairs that, in the eyes of some, crossed into the professional world. Jurvetson was eventually voted out of the firm in the middle of its investigation, and he has since sat in limbo in Musk’s orbit.
Three different corporate governance experts told Recode that this long of a leave is rare for a board member except in the case of a serious health issue.
“This is quite unusual,” said Espen Eckbo, the head of Lindenauer Center for Corporate Governance at Dartmouth.
Some clarity could arrive in the next few weeks: Tesla will soon file its definitive proxy statement with the SEC. Jurvetson, who has been on the board since 2009, was nominated to a three-year term last year, and the proxy could offer an update on his status. As a public company, Tesla’s board is officially elected by Tesla’s shareholders.
The situation at SpaceX is different as a private company: DFJ would traditionally have some right to nominate someone to the seat as a condition of its investment into SpaceX. But the relationship between SpaceX and DFJ, sources say, is very much a relationship between Musk and Jurvetson specifically. Musk also holds super-voting shares that, according to a copy of the company’s 2017 Certificate of Incorporation obtained by Recode, give him extra power in corporate decision-making,
Some SpaceX investors have said they have detected little urgency from company leadership over the last few months to fill the slot, which isn’t critical to company operations. And for DFJ — even without Jurvetson — a different partner, Randy Glein, serves as a non-voting board observer at SpaceX, giving the firm and their limited partners some visibility into its most valuable portfolio company, which is now worth about $25 billion.
The firm though, eager to protect its sensitive relationship with the serial founder and celebrity CEO, is giving wide deference on the SpaceX board seat to Musk, according to multiple people familiar with the firm’s thinking.
Musk has yet to publicly say anything about how he feels about Jurvetson’s conduct over the last five months, except to characterize his attendance at a controversial party hosted at Jurvetson’s house. Musk did not respond to a request for comment about whether he wanted Jurvetson to remain on the boards.
DFJ, though, has stayed on Musk’s good side, enough that the firm was able to invest in SpaceX’s new $500 million round and was even able to make sure that DFJ’s own investors, or limited partners, could directly finance the company as well, according to a person with knowledge of the round.
It is always messy when an investor leaves a venture capital firm — but especially so given the acrimonious parting between DFJ and Jurvetson. Venture firms typically have to figure out how to handle management fees, firm governance and board seats for portfolio companies. Investors sometimes represent their old firms on boards even after they’ve left.
DFJ was at first slow to permanently replace Jurvetson on his other, lower-profile board assignments, according to people familiar with the firm’s activity. But since then, DFJ partners have taken over all but three of Jurvetson’s board seats and apportioned the portfolio between them, according to DFJ’s website, with at least two of his seats going to Heidi Roizen, for instance.
Yet as recently as late February, Jurvetson was named but still not signing Tesla documents filed with the SEC, suggesting that he has not yet been restored to a position of governance. Jurvetson is still listed as a director on Tesla’s website.
Jurvetson remains an “active member” of the board of a third DFJ-backed startup, quantum computing company D-Wave, which confirmed to Recode that he is not on leave there.
Despite the drama, Jurvetson has been marketing himself as a current member of the three company boards. He has attended SpaceX and Tesla events as a VIP, according to social media postings. The website for his new venture capital firm read two weeks ago that he “currently serves on the boards of SpaceX, Tesla and D-Wave.”
But that sentence has since been deleted.
This article originally appeared on Recode.net.
