Tesla Chair’s Re-Election to Board Opposed by Second Proxy Firm
Tesla Chair’s Re-Election to Board Opposed by Second Proxy Firm
(Bloomberg) -- Tesla Inc. investors should vote against the re-election of Robyn Denholm to the carmaker’s board due to an arrangement with Elon Musk that raises corporate governance concerns, according to the second-largest proxy-advisory firm.
Glass Lewis criticized Tesla’s decision not to renew its directors’ and officers’ liability policy due to high premiums quoted by insurers. Tesla disclosed in April that Musk, its chief executive officer and a board director, agreed to personally provide coverage for a year.
“It is the duty of independent directors to oversee management in the best interests of shareholders,” said Glass Lewis in a report. “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.”
Glass Lewis said it recommends voting against Denholm, who has been chair of the board since November 2018, because she heads the audit committee that permitted the insurance arrangement. Institutional Shareholder Services also opposes her re-election, although it has cited the amount of compensation Tesla awards its directors and insufficient limits on how many shares they have pledged to borrow against.
Shareholders who rely on their own judgment or research have voted with Tesla and in opposition to proxy advisers in the past. The carmaker’s annual meeting is scheduled for July 7.
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