Tesla shareholders strike down proposals to remove Musk as chairman and shake up board

Elon Musk

Aaron P. Bernstein | Reuters
Elon Musk

Tesla shareholders have apparently rejected two proposals that supporters had said would bring transparency and better governance to the electric car maker’s board.

At its annual meeting Tuesday, Tesla shareholders re-elected three directors and struck down a proposal that would have forced Tesla to split up its chairman and chief executive roles, both of which are currently held by CEO Elon Musk.

Shareholder Jiang Zhao of Concord, California, who owns 12 shares of Tesla stock, brought the proposal to have an independent chairman forward because he said it was necessary to prevent conflicts of interest.

Shareholders also struck down a second proposal to remove three Tesla board members up for reelection this year. The proposal was brought by the CtW Investment Group, which works with pension funds for unions. The group said board members Antonio Gracias and Kimbal Musk, Elon Musk’s brother, were too close to the CEO to ensure needed independence. The third, 21st Century Fox CEO James Murdoch, lacks relevant experience and has been implicated in scandals at Fox and News Corp., CtW had said in a letter to Tesla shareholders.

Corporate governance experts had not expected the proposals to pass, but they had gained the support of proxy advisory firms Institutional Shareholder Services and Glass-Lewis.

Musk owns a 22 percent stake in the company.

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