Electric car company Tesla has come under fire for several controversies recently, including a massive Model S recall and investigations into its Californian factory. Its 2018 Annual Meeting of Stockholders event, scheduled for June, will allow shareholders to vote on select proposals, like re-electing board members and consenting to Tesla’s public accounting firm. Easily the most salient of those, however, is one that suggests swapping Chairman of The Board Elon Musk with an independent party.
Californian Tesla shareholder Jing Zhao, who owns 12 shares in the company, assembled the proposal. The argument behind Zhao’s suggestions centers around the benefits of unbiased leadership, noting that Musk’s SolarCity and SpaceX projects may not allow him to remain distanced from personal interests. According to Zhao, “An independent chairman of the board of directors is the prevailing practice in the international market, such as in the United Kingdom. In the United States too, many big companies already have or began to have an independent Board Chairman. Tesla should not be exception.”
Zhao has made his name as a shareholder activist who proffered other proposals at even larger companies like IBM and Apple. Meanwhile, Tesla’s board is asking shareholders vote against Zhao’s suggestion, stating, “the Company is still at a point in its development where we must execute well in order to realize our long-term goals, and separating the roles of Chief Executive Officer and Chairman at this time would not serve the best interests of the Company or its stockholders.”
Although it is unliked Tesla might be ousted.. stay tuned till June 5 to see the result of the votes.