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Technology

Tesla recruits Hiro Mizuno, ex-manager of Japan's $1.5tn pension fund

Elon Musk praised former CIO for opposing short-selling

Hiromichi (Hiro) Mizuno, the former executive managing director and chief investment officer of Japan's Government Pension Investment Fund, will join Tesla. (Source photos by Reuters)

PALO ALTO, U.S./NEW YORK -- Tesla has brought in Hiromichi Mizuno, a veteran Japanese financier, as a new member of its board of directors and audit committee, according to company regulatory filings made Thursday.

Mizuno previously served as executive managing director and chief investment officer of Japan's $1.5 trillion Government Pension Investment Fund -- one of the world's largest institutional investors -- since January 2015.

"In addition to his understanding of financial markets and economics, Hiro brings to the Tesla Board an expertise in international policy," Tesla said. "We are excited that Hiro has joined our mission to accelerate the world's transition to sustainable energy."

During his time at the GPIF, Mizuno emphasized the importance of environmental considerations in portfolio management and an advocate for sustainable and responsible investment. He also earned a reputation for challenging short-selling to promote long-term value creation by corporations.

The Japanese investment guru has also served at many business and government advisory boards, including the World Economic Forum's Global Future Council, the Japanese government's strategic fund integrated advisory board, and the board of the PRI, an investor initiative to promote responsible investment in partnership with the United Nations.

Mizuno's compensation package at Tesla includes an initial award of an option to purchase 2,778 shares of Tesla's common stock, vesting and exercisable on June 18, assuming continued service on such date. For serving on the audit committee, he will receive an initial award of an option to purchase 4,000 shares of Tesla's common stock, vesting in 12 equal monthly tranches, according to filings.

Tesla's last board addition was in 2018, when Oracle founder and chairman Larry Ellison and Walgreens executive Kathleen Wilson-Thompson joined as part of an agreement between Tesla and the Securities and Exchange Commission. After Mizuno's appointment the board now consists of 10 members.

Mizuno, whose term at the GPIF ended in March, is known for his position against short-selling, a practice that has plagued Tesla.

In December, the GPIF halted stock lending from its now over $400 billion foreign equity portfolio for short-selling purposes.

The controversial move, particularly unpopular among hedge funds, earned praise from Tesla founder and CEO Elon Musk, who said the pension fund did the "right thing" and that "short-selling should be illegal."

Musk has taken Tesla's battle with short-sellers personally. He is in constant debate with prominent Tesla short-sellers on Twitter and once called them "jerks who want us to die."

Tesla has long been a favorite short target for some investors who believe the electric-car maker is overvalued. The company currently has a higher valuation than any U.S. carmaker in history, which some short-sellers said is hyped by Musk's ambitious statements and Tesla fans. In the past few years, its failure to deliver on his lofty promises, such as to produce an annual 500,000 vehicles in 2019, has driven much of the stock volatility but also created opportunities for short-sellers.

In an interview with the Financial Times, Mizuno said the practice of short-selling is not consistent with its socially responsible investment philosophy, part of which is a commitment to supporting companies for the long term.

"I never met a short seller who has a long-term perspective," he told the FT.

During his tenure at the GPIF, Mizuno championed environmental, social and corporate governance (ESG) investment principles. The Japanese investment behemoth became a signatory of the Principles for Responsible Investment in his first year there.

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