By
Steve Muchoki
April 19th, 2024
Tesla (TSLA) stock has difficulties in fixing its positions above $1,000. After hours it has gone below this milestone level again.
Tesla Inc (NASDAQ: TSLA) stock price was down slightly at the close of the week. This happened as CEO Elon Musk has indicated that the scheduled July 7 Tesla shareholder meeting will be shifted to a later date.
Musk revealed this in a tweet.
Will CyberTruck be at the Shareholders mtg? 😀✨
— K10✨ (@Kristennetten) June 20, 2020
Proxy advisors Institutional Shareholder Services (ISS) and Glass Lewis are doing all they can to compel shareholders to oppose the reelection of Robyn Denholm as Tesla’s (TSLA) Board Chairman.
Yesterday, Tesla (TSLA) stock closed at $1,000.90 (-0.30%). After hours it continued falling and was down 0.90%, at $991.90.
The proxy advisors have been worried about the high remunerations for Tesla management executives. These all happened under Denholm’s watch. Robyn Denholm became Tesla board Chairman in November 2018.
Denholm’s Re-election as Tesla Chairman Faces Obstacles
Denholm took over from Musk as a compromise with the United States Securities and Exchange Commission (SEC). This was as a result of Musk’s now-infamous tweet about him getting funds to take Tesla (TSLA) private at $420 per share. As usual for Elon, his erratic tweets got him in trouble. The SEC unwilling to let that tweet go had to as a matter of ethics force Musk to step down as chairman. Tesla institutional shareholder Nia Impact Capital has also urged shareholders to cast their votes against mandatory arbitration at Tesla.
Mandatory arbitration policies are in line with the non-disclosure practices by many companies. They serve to allow for dispute resolution of many often controversial issues that arise within the workplace.
Rather than expose companies to civil and criminal liabilities, mandatory arbitration allows for alternate dispute resolution by other means.
The problems with mandatory arbitration include the intentional silencing of employees over critical issues. Such issues ay include racial discrimination, sexual harassment, malevolence by senior employees, and so on.
Mandatory Arbitration Is an Issue
Nia Impact Capital has forced shareholders to vote that Tesla management will have to report the details of mandatory arbitration. This will help create a safer and freer atmosphere at the electric vehicle automaker.
Tesla (TSLA) investors have taken a keen interest in who becomes Chairman this time. Sources say that proxy advisory firm Glass Lewis is firmly opposed to Denholm’s re-election at this time. Specifically, Glass Lewis said in a report:
“It is the duty of independent directors to oversee management in the best interests of shareholders.”
“We are concerned that this D&O arrangement gives the company’s independent directors a direct, personal financial dependency upon the CEO they are tasked with overseeing”, reads the report further.
Institutional Shareholder Services (ISS) is against Denhom’s re-election as Chairman due to the high compensations. This tug of war between the proxy advisors and management seems to have occurred before. In the past, shareholders have been known to vote against the recommendations of the proxy advisors.
It is unclear if a similar situation will occur again. For now, though, anything that moves Tesla (TSLA) stock price up is a welcome development.