Elon Musk, the CEO of Tesla (NASDAQ:TSLA), loves portraying himself as a free-speech absolutist who promotes robust discussion on significant matters. This tone, however, shifts when problems are more local, such as during the annual meeting of the electric vehicle company.
At Tesla (NASDAQ:TSLA)’s forthcoming annual meeting, which is set for later this week, stockholders will vote on a total of eight proposals supporting or at least respecting the rights to freedom of association as well as collective bargaining, as well as measures to expand shareholder proxy access and board diversity reports.
However, they all share a fundamental trait: Musk and the Tesla (NASDAQ:TSLA) Board reject them.
Tesla’s Primary Objective
Tesla (NASDAQ:TSLA) stated in its proxy statement that the Board continues to reject proposals that aim to influence Tesla (NASDAQ:TSLA)’s strategic business choices and day-to-day operations in non-essential or mission-defeating ways.
In addition, the Board considers all reasonable stockholder viewpoints in good faith. Still, it must finally evaluate the interests of all stakeholders and what is most conducive to creating long-term value.
Neither is this startling nor exclusive to Musk or Tesla (NASDAQ:TSLA).
Companies typically reject shareholder recommendations. They oppose the premise that corporate governance of the management, by the managers, and for the managers will endure on Earth. However, Tesla (NASDAQ:TSLA) faces criticism from two prominent proxy-evaluation firms advising institutional investors on how to vote for the company’s shares.
Tesla Faces Opposition
According to MarketWatch, Institutional Shareholder Services and Glass Lewis oppose the re-election of two Tesla (NASDAQ:TSLA) board members and support six shareholder motions. The opposition to the board members stems from their inability to implement a shareholder resolution passed at last year’s annual meeting to establish a single class of board members who would be re-elected yearly.
Tesla (NASDAQ:TSLA) stated in a response filed with the SEC this week that although a majority approved the 2021 Declassification Proposal of the shares entitled to vote and present in person or by proxy, such votes represented only 31.4% of the outstanding shares on the record date for such meeting and would have fallen far short of the supermajority threshold needed to approve a proposal to amend the certificate of incorporation to effectuate a full declassification.
Glass Lewis and ISS want shareholders to support shareholder proxy access, an annual report on efforts to prevent harassment and discrimination, a report on Tesla’s lobbying efforts, a report on employee arbitration moves, information on water risks, and measures concerning the company’s collective bargaining policy.
Featured Image: Megapixl @Sergiomonti
