Tesla CEO Elon Musk gestures as he visits the construction site of Tesla’s Gigafactory in Gruenheide near Berlin, Germany, August 13, 2021. Patrick Pleul/Pool via Reuters
Tesla (TSLA) shareholders will vote on nine proposals Thursday afternoon, including whether to oust CEO Elon Musk's brother, Kimbal, from the board, as the electric car giant holds its annual shareholder meeting at its Fremont, California facility.
According to a Tesla securities filing, the shareholders will also consider whether to jettison James Murdoch, son of media titan Rupert Murdoch, from the board; whether to require Tesla to publish reports on diversity, human rights, and employment disputes; whether to slim down director terms and numbers; and whether to eliminate certain supermajority voting rights.
Five of the nine proposals are made by shareholders, and four by its board.
Activist proxy advisory firm Institutional Shareholder Services is objecting to the board’s recommendation to re-elect James Murdoch, who's the CEO of 21st Century Fox, and Kimbal Musk, a chef and entrepreneur, on the grounds that they're overpaid for their positions. Shareholders have previously tried to oust both Kimbal Musk and James Murdoch, arguing in 2018 that they failed to hold Tesla's CEO accountable for his actions, as CNN reported.
Kimbal Musk attends the LA premiere of “The Game Changers” at ArcLight Cinemas Hollywood on Wednesday, Sept. 4, 2019, in Los Angeles. (Photo by Richard Shotwell/Invision/AP)
Tesla is also facing scrutiny over its employment practices during the shareholder meeting. On the heels of a California jury’s $137 million verdict against Tesla in favor of a Black contract worker, activist shareholder Nia Impact Capital is asking shareholders to vote for a proposal that would require Tesla to report on the impact of its use of mandatory arbitration — a controversial practice that keeps disputes out of court and behind closed doors.
Tesla’s directors have discouraged shareholders from voting in favor of the measure, as well as a similar measure from shareholder Calvert Research and Management that is pushing for additional transparency.
In a proposal to require Tesla to publish an annual assessment of its diversity and inclusion efforts, Calvert said, “Tesla has not fully released meaningful information allowing investors to determine the effectiveness of its human capital management programs related to workplace diversity.”
Plans to shrink the number of directors from nine to eight came as a result of notice from board member Antonio Gracias III, who informed the company that he will not seek re-election when his term ends on Thursday. Tesla’s board has also requested that shareholders approve the elimination of Class III tier board members, and adjust all board terms to two years, along with eliminating a supermajority vote requirement for certain changes.
The Comptroller of the City of New York, holder of 151,745 shares of Tesla’s common stock, is asking for shareholders to vote in favor of its proposal to require that Tesla create an independent board-level committee to oversee corporate policies on human capital management, including workforce equity and non-executive compensation.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
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