Tesla directors get more moderate support, shareholder proposals get support Reuters

© Reuters. File photo: On April 26, 2021, the TESLA logo can be seen outside a dealership in Brooklyn, New York City, USA. REUTERS/Shannon Stapleton/File Photo

Authors: Ross Kerber and Hyunjoo Jin

(Reuters)-Electric vehicle manufacturer Tesla (NASDAQ:) Inc reported on Wednesday that at the most recent general meeting of shareholders, two directors received a lower rate of support than usual, and after the court’s decision in support of the arbitration, it demanded The call to review the company’s use of compulsory arbitration received greater support. Temporary employees who accused Tesla of racial discrimination.

The vote shows that shareholders are increasingly dissatisfied with the company.

Tesla stated in a securities document that the approval rate for shareholders’ resolutions on how to handle arbitration matters rose from 27% of similar proposals in 2020 to 46% at the last annual meeting. The two directors who participated in the election this year also received a lower support rate than last year.

The non-binding resolution on arbitration requires Tesla’s board of directors to study the impact of its use of mandatory arbitration to resolve workplace harassment and discrimination complaints. After a jury awarded $137 million to Tesla contractors for workplace racism last week, this issue has attracted more attention.

Tesla opposed the resolution, believing that arbitration can benefit both parties in the dispute. The company did not immediately comment on the shareholder vote.

Other technology companies have reduced or eliminated mandatory arbitration, including Uber Technology (NYSE:) Inc and Google’s parent company Alphabet (NASDAQ:) Inc. In April, nearly half of Goldman Sachs Group Inc (NYSE:) shareholders voted to review the bank’s use of compulsory arbitration.

Kristin Hull, CEO of Nia Impact Capital, who submitted the resolution, called this year’s higher support “a huge improvement because we educate people why this is important for building an innovative team with a diverse and inclusive company culture.”

Hull said that according to his proxy statement, Tesla CEO Elon Musk owns 23% of Tesla, which means that the measure will be passed outside of his vote.

Another measure related to race issues won a majority of support, with 57% of the vote. The measure was submitted by Calvert Research and Management, requiring Tesla to report in detail on its diversity and inclusion efforts. Tesla opposed the measure on the grounds of current and future reporting plans.

Wednesday’s application showed that last week’s two company directors showed that James Murdoch received 70% of the votes, and the Olon Musk brothers received 80% of the votes.

Directors of large American companies usually get 90% or more support. Francis Byrd, a corporate governance consultant at Alchemy Strategies Partners, stated that at Tesla, “problematic director candidates should seriously think about the quality of their supervision and how they/the company can better communicate it to the market. “

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