Tesla Inc.’s directors will continue to face election every three years, after investors rejected a bid by pension funds for the board led by Elon Musk to be subject to annual votes.
The electric-car maker entered its annual meeting Tuesday against declassifying its board, which would have allowed investors to cast ballots for or against directors every year. Shareholders approved the company’s recommendations on all agenda items, Todd Maron, Tesla’s general counsel, said in Mountain View, California.
The failed proposal had been introduced by a group of Connecticut pension funds that’s criticized Tesla for filling its board almost entirely with members personally or professional tied to Musk. While two major proxy advisory firms had supported the move to annual elections, arguing it would better allow shareholders to hold directors accountable, Tesla said the proposal risked inhibiting the board’s ability to think long-term.
Almost all S&P 500 companies have moved to annual elections for board members as of last year, up from just 56 percent a decade earlier, according to a report by executive-search consultant Spencer Stuart. About 58 percent of Russell 3000 companies have declassified boards, data from ISS Analytics show.
Musk, 45, is both the CEO of Palo Alto, California-based Tesla and the chairman of the company’s small board. The six other directors include his younger brother Kimbal Musk, a food entrepreneur; Antonio Gracias, the founder of a private equity firm; Ira Ehrenpreis, a venture capitalist; Brad Buss, the former chief financial officer of SolarCity, which Tesla acquired last fall; Steve Jurvetson, a venture investor; and Robyn Denholm, the only woman and COO of Telstra Corp. in Australia. Gracias and Jurvetson also serve on the board of SpaceX, Musk’s space exploration company.
Shareholders voted at the meeting to re-elect Elon Musk, Denholm and Jurvetson to each serve another set of three-year terms. Investors including the Connecticut pension funds have called on the company to add two more independent board members, which Musk has said he’s planning to do.
Tesla shares rose 1.6 percent Tuesday to close at $352.85 in New York, a new record high, and are up 65 percent this year.