Portion of Tesla Shareholders Risk Being Unable to Vote at AGM  

June 5, 2024

Tens of thousands of Tesla’s international retail investors, who hold nearly $17 billion worth of shares, may not be represented at the company’s annual meeting, FT reports.

Investors in Europe and Asia have found stockbrokers and online trading platforms where they hold their share accounts have failed to implement sufficient cross-border systems.

As a result, Tesla estimates that holders of about 3% of its shares will be unable to cast their votes electronically from outside the US at the company’s Annual Meeting of Stockholders on June 13.

That is equivalent to $16.7 billion of the company’s $558 billion valuation.

Tesla’s international investors are expected to miss voting on two resolutions that the company has been campaigning for investors to back: one to re-ratify Elon Musk’s $56 billion pay package and another to reincorporate the company in Texas.

In January, a Delaware judge ruled in favour of a Tesla shareholder to void Musk’s 2018 pay package over concerns about transparency and fairness to the rest of the board.

Following the ruling, Musk insisted that the electric-car maker relocated out of the state and asked shareholders to re-vote on the pay package at this month’s meeting.

Investors’ inability to vote could pose issues for Tesla’s campaign as the proposal to reincorporate in Texas has a higher threshold, which requires a majority of all outstanding shares to vote in favour. This means any votes not cast will counted as against the proposal.

Hargreaves Lansdown, which is one of the international stockbrokers through which Tesla shareholders have been unable to vote, told FT: “Last year we introduced AGM voting for UK and European companies and expanding that service to other overseas jurisdictions is something we are working on.

“We have been working with our proxy service provider to try and facilitate this event as a one-off. However, it has not been possible.”

Minerva’s blog focuses on the latest developments in ESG investing and stewardship. Minerva is a global provider of sustainable stewardship solutions with over 25 years of expertise. Minerva empowers investors by providing essential tools, including ESG research and data, enabling them to navigate the intricate landscape of stewardship and proxy voting, whilst ensuring their decisions are well-informed and aligned with sustainable principles.