By noreply@blogger.com (Newsrust)
Tesla has pushed back most proposals from activist investors who sought to pressure the company and its chief executive, Elon Musk, to change how they treat workers and disclose more about how they do pressure on government officials.
Only one shareholder proposal prevailed, according to preliminary results announced by the company. It will allow large shareholders to appoint alternate board members, a common practice among large corporations. Tesla has often faced criticism that its board lacks diversity and people willing to stand up to Mr. Musk.
The proposals required a two-thirds majority to pass. The company did not announce the vote tally Thursday at the company’s plant in Austin, Texas, saying it would provide results in the coming days.
Tesla is widely credited with pioneering the electric car market and setting the auto industry on the right track to drastically reduce its greenhouse gas emissions. But the company has been accused of racial discrimination at its California plant and of being union busting, and it has been criticized for having a board made up of people close to Mr Musk. In May, Standard & Poor’s removed Tesla from the S&P 500 ESG Indexa list of companies that meet certain environmental, social and governance standards.
“No one doubts the historic seismic achievements of Tesla and Musk,” Wedbush Securities analyst Daniel Ives said before the meeting began. But he said investors were concerned about Mr Musk’s failed bid on Twitter, growing competition in the electric vehicle market and production issues at Tesla.
Learn more about electric vehicles
As the global automotive market stagnates, the popularity of battery-powered cars is skyrocketing around the world.
“Musk had a magic carpet ride, but you’re starting to see some frustration among investors,” Mr Ives said.
In recent years, shareholder activists have worked to change the behavior of Tesla and other companies, in some cases with support from big investors like BlackRock and Vanguard. But the move prompted a backlash from conservative lawmakers and some business executives. In May, Mr. Musk called ESG “an outrageous scam.”
Last year, Tesla faced five proposals from activist investors, all of which lost.
Tesla management opposed all eight resolutions presented Thursday. A board proposal for a three-fold stock split has won shareholder support and will make Tesla shares, which currently trade at more than $900, easier to buy for individuals and employees.
The shareholder resolutions included a measure asking Tesla to disclose more information about its government lobbying’s compliance with efforts to limit climate change. “Tesla is a notable laggard in environmental, social and governance-related disclosure,” said the resolution, which was submitted by the Nathan Cummings Foundation and the Green Century Equity Fund.
The New York State Common Retirement Fund, which administers the state employee retirement plan, filed a resolution asking management to file an annual report on its efforts to prevent racial discrimination and sexual harassment. California Department of Fair Employment and Housing sued Tesla in February after receiving what it said were hundreds of complaints from employees who said they were racially slurred, assigned to physically demanding work and denied transfers and promotions.
In a response to the resolution, Tesla said it “does not tolerate discrimination, harassment, retaliation, or any mistreatment of employees in the workplace or in work-related situations.”
Mr Musk did not directly respond to criticism from shareholders when he spoke after the official part of the meeting ended. Instead, he announced that Tesla had recently produced its three millionth vehicle and had become solidly profitable. Just 10 years ago, he said, Tesla produced only a few thousand cars and had little chance of survival.
“I think it’s going to go up from here,” he said.
Tesla says its mission is “to accelerate the global transition to sustainable energy.” But shareholders have become increasingly critical of other aspects of the company’s behavior and of Mr. Musk.
Several shareholder proposals have been approved by Institutional Shareholder Services, which advises large investors on how to vote at annual meetings. This included the proposal allowing shareholders to nominate alternate board nominees.
Tesla has often come under criticism that its board, whose members include Elon Musk’s brother Kimbal Musk, has been unable to stop the chief executive from making or saying things. things that harm the automaker.
In a response, Tesla said it had added more independent directors in recent years and that allowing shareholders to appoint members “could be exploited by corporate looters.”
Shareholder proposals have received significant support in the past. Last year, 46% of shareholders voted in favor of a proposal challenging a Tesla policy that requires employees to resolve discrimination and sexual harassment complaints before an arbitrator rather than in court. The resolution was filed by Nia Impact Capital in Oakland, California.
The New York chapter of the Good Shepherd Sisters filed a resolution this year asking Tesla to do more to ensure it does not use child-mined cobalt to mine cobalt in the Democratic Republic of Congo.
Kristin Hull, managing director of Nia Impact Capital, said activist investment firms like hers were taking the lead in confronting Tesla management while large institutional shareholders, with much more clout, stayed back. .
“It’s the smaller asset managers and the women-led asset managers and the nuns who are running this,” Dr Hull said. Big shareholders, she said, “just pick up the phone.”
Source: Tesla faces a pressure campaign from activist shareholders
Category: Automobile, Finance