TuSimple Co-Founder Blames Exit on CEO Salary and Declining Autonomy

TuSimple co-founder Xiaodi Hou has refuted allegations from senior management that he was trying to poach staff for his new venture. In a LinkedIn post, Hou said he resigned from TuSimple’s board last week over disagreements over CEO Cheng Lu’s compensation package, as well as the company’s move from Tier 4 d. autonomy at level 2 of autonomy.

“I believe the so-called investigation was a retaliatory action launched by the CEO of TuSimple in response to my disagreements on several decisions,” Hou wrote in a LinkedIn post.

Hou told TechCrunch that he didn’t start another business, implying that it makes no sense to accuse him of staff poaching.

“I am regularly approached by current TuSimple employees who are disappointed with the current direction and direction of the company,” Hou wrote in a statement. “They come to see me because we were a family, and we still are. Over the past few months, many employees have contacted me for advice on their careers and changes within the company. Many have asked about my own projects. In each engagement, I have remained true to my responsibilities and duties as director.

Hou went on to accuse TuSimple management of cornering, harassing and threatening certain employees during their investigations.

Hou said his resignation was partly prompted by his rejection of current CEO Cheng Lu’s “lucrative” pay package, which was awarded to the executive days after the layoffs that wiped out 25% of the company’s workforce .

According to a filing, Lu receives an annual base salary of $450,000, a target annual bonus of around $400,000 and a monthly housing allowance of $9,000. If Lu is terminated without cause, or if there is a change in control of the company (such as if the company is sold), Lu receives $15 million.

Lu’s compensation and severance package were agreed on Dec. 14, 2022, according to filings. Lu, Hou, and Chen were the only remaining board members at the time after firing everyone. A source familiar with the matter claimed that Lu and Chen had changed the company’s governance in a way that would allow them to circumvent Hou’s vote against Lu’s compensation package. company, Wendy Hayes and Michael Mosier, joined the board the next day. We have reached out to TuSimple to comment on the source’s claim.

Hou also said he was openly critical of TuSimple’s “decision to shift the focus from Level 4 autonomous driving to Level 2 assisted driving.”

Level 4 autonomy means the system can fly itself without requiring a human to take control in a specific set of circumstances, such as a geo-fenced area. Level 2, or Advanced Driver Assistance Systems (ADAS), can perform some automated tasks such as lane assist, cruise control, or emergency braking, but they require the human driver to maintain most of the control over the vehicle.

TuSimple has not publicly announced any intention to upgrade from Tier 4 to Tier 2, but it would completely change the company’s business model.

In December, TuSimple’s deal with Navistar to jointly develop and produce purpose-built autonomous semi-trailers by 2024 fell through, leaving TuSimple without a clear direction for commercialization.

Lu denied to TechCrunch that TuSimple plans to focus on L4. He said the company would soon announce its progress on its standalone domain controller, which has the capability to support L2 solutions. Lu also pointed to TuSimple’s Analyst Day presentation in May 2022, which outlined the company’s goal of producing ADAS L2+ in partnership with Nvidia. He reiterated that TuSimple still focuses a lot on L4.