Tesla overcomes activist investors at AGM

August 11, 2022

One resolution on appointments overcame board concerns

Tesla shareholders have broadly voted in line with board recommendations, rejecting proposals centred on the environment and business governance issues.

In total, only three of the 13 proposals did not fall in line with board recommendations, preliminary tallies shown at the annual shareholder meeting in Austin, Texas revealed.

This meeting took place on August 4, 2022.

Despite efforts from activist investors to force Tesla to change its treatment of workers and to become more transparent on how it lobbies government officials, shareholders overwhelmingly backed most of the proposals.

Shareholder proposals that failed included motions supporting the right of employees to form a union, as well as a proposal that would have seen the company report its actions in avoiding racial discrimination and sexual harassment on an annual basis.

Several investors targeted Tesla board members Ira Ehrenpreis and Kathleen Wilson-Thompson, - both members of the company’s nominating and governance committee. The board members did not implement a shareholder proposal that the majority of Tesla’s shareholders approved last year.

A resolution submitted by the Nathan Cummings Foundation and the Green Century Equity Fund, which called for greater disclosure on whether its lobbying efforts were aligned to efforts to curb climate change, was also defeated.

“Tesla is a notable laggard when it comes to environmental, social, and governance-related disclosure,” the resolution read.

Meanwhile, shareholders backed a proposal that would enable large and long-term stockholders with a minimum of 3% of the shares to nominate directors, overcoming concerns from the board that it would dilute its ability to set Tesla’s direction.

While the practice is common within large organisations, Tesla had argued that such a proposal could create opportunities for actors to skew Tesla’s plans.

Last year, Tesla contended with five proposals from activist investors, but none were successful.