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Tesla shareholders broadly follow board recommendations at annual meeting

Published 08/04/2022, 01:12 PM
Updated 08/04/2022, 07:36 PM
© Reuters. FILE PHOTO: A view of the Tesla service centre in Singapore July 16, 2022. REUTERS/Chen Lin
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By Akash Sriram

(Reuters) -Tesla Inc shareholders voted for board recommendations on most issues at the company's annual meeting on Thursday, including re-electing directors, approving a stock split, while rejecting proposals focused on environment and governance.

Votes on three of the 13 proposals did not follow board recommendations, according to preliminary tallies presented at the annual shareholder meeting in Austin, Texas.

Over board opposition, shareholders passed an advisory proposal that would increase investors' ability to nominate directors.

Two board proposals - cutting directors' terms to two years and eliminating supermajority requirements - did not receive supermajorities necessary to pass.

Dressed in black, Chief Executive Elon Musk heavily influenced the voting and spoke to an enthusiastic crowd after the vote. He owns 15.6% of Tesla (NASDAQ:TSLA), according to Refinitiv data, after selling millions of shares last year.

Investors approved a three-for-one stock split. While a split does not affect a company's fundamentals, it could buoy the share price by making it easier for investors to own the stock.

Shareholder proposals that failed included ones arguing for endorsing the right of employees to form a union, asking the company to report its efforts in preventing racial discrimination and sexual harassment annually, as well as reporting on water risk.

A proposal asking directors to enable large and long-term stockholders or groups with at least 3% of the shares to nominate directors, cleared objections from the board. The board had earlier said a proposal like this could create opportunities for special interests to skew Tesla plans.

© Reuters. FILE PHOTO: Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China January 7, 2020. REUTERS/Aly Song/File Photo

Musk said the company aimed to hit a production run rate of 2 million vehicles per year by the end of 2022 and would continue building factories.

Tesla has factories in California and Shanghai and is ramping up two more in Austin, Texas and Berlin. Musk said Tesla might be able to announce an additional factory this year and he expected eventually to have 10-12 so-called gigafactories.

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