Tesla investors will have less opportunity to voice their grievances to management at Tesla’s annual meeting in Austin, Texas, on Tuesday, a move some shareholders have taken to stifle dissenting voices at Tesla. This is because they claim that it is a deliberate attempt by an automaker to try to do so.
In October, Tesla moved its shareholder meeting forward from August to May, shortening the time it takes to submit proposals to shareholders by two months. At the end of its 60-page regulatory filing, Tesla announced a new deadline for proposals of December 22nd, a change most activist investors missed.
Tesla and its CEO Elon Musk speak out on a range of issues, including allegations of racism at its California factory, the company’s hostility to labor unions, and whether its board of directors oversees management. It has often been criticized by investors. Mr. Musk and Tesla’s board members dismissed discrimination complaints, pointing to the company’s strong earnings and sales growth as evidence of its extremely strong performance.
At several recent annual meetings, activists put forward proposals to encourage the company to consider changes, but most failed to garner enough support. He had only one shareholder proposal on the agenda this year. The proposal, filed by an Icelandic investor, asks Tesla to make plans to replace Musk should he resign or become unable to carry out his duties.
According to the Securities and Exchange Commission’s decision, Tesla has done nothing wrong in speeding up the deadline. But some activist shareholders saw it as a deliberate attempt to get the company to treat its employees better and curb efforts to add more directors willing to stand up to Mr. Musk.
“This was really despicable,” said Christine Hull, chief executive of Nia Impact Capital in Oakland, Calif., saying the company has asked employees to file discrimination complaints before an arbitrator rather than in court. He has also challenged Tesla’s policy of seeking a solution.
Tejal Patel, executive director of SOC Investment Group, which represents the interests of the union pension fund, said the deadline change “shows how Tesla treats its shareholders.”
Tesla did not respond to a request for comment.
Some investors have reacted to some shareholder criticism from Musk when he announced that he would nominate Linda Yaccarino as CEO of Twitter, a social media company he acquired last week. I could feel the signs. Hiring Yaccarino would give Musk more time to run Tesla. Investors complain that Twitter is distracting Mr. Musk from Tesla as the automaker faces weak demand and fierce competition, leading to price cuts.
Nia Impact and SOC are one of eight investment funds and activist groups that took place last month Calling on Tesla shareholders Reject the nomination of JB Straubel to the Board of Directors. They said Straubel, who served as a senior Tesla executive for years before retiring in 2019 to start a battery recycling and materials company, was “clearly an insider and already lacking independence.” “It’s not the right choice for a board that has a board.” ”
Glass Lewis, which advises institutional investors, also told Tesla shareholders not to vote for Mr. Straubel, saying the election “would only exacerbate the long-standing lack of independence on Tesla’s board of directors.” urged to
Several proposals by activist investors have received significant support in the past, and last year passed despite opposition from Tesla’s board of directors. The move allowed shareholders to nominate directors, but none this year.
Musk owns 13% of Tesla’s stock, so the shareholder proposal would need significant support from other shareholders to pass.
But while most of the activist proposals are non-binding and merely ask the company’s board and management to consider changes, Musk sold a portion of his Tesla stake to finance the Twitter acquisition. I would have had more chances this year after what I did.
Tesla has also faced criticism from Washington. A group of eight senators led by Connecticut Democrat Richard Blumenthal earlier this month called on Tesla to stop asking employees and car buyers to settle complaints before an arbitrator.
The letter said the practice “prevents workers and consumers from bringing discrimination allegations and consumer safety complaints to court, and effectively shields businesses from both accountability and public scrutiny.” It is written that
Some activist shareholders said they plan to try to introduce the measures during the meeting, which starts at 3 p.m. Central Time.
