Notes From The 2024 Tesla Annual Stockholder Meeting

June 14, 2024June 14, 20242 weeks ago Carolyn Fortuna 0 Comments

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

A peppy techno beat rolled and repeated in the online background leading up to the 2024 Tesla Annual Stockholder Meeting. For many small shareholders like me, sitting in on the meeting was an anomaly. After all, what voice would we little people have in the everyday workings of a corporation? Not much, we answer as a general rule. But this meeting had the potential to be different. We were challenging the CEO to step up and lead in a way that was healthy and fruitful, thoughtful and well-planned. Would our idealistic wishes come to be?

“Welcome to Tesla,” we heard, “the home of Tesla.” Brandon Ehrhart, general counsel and corporate secretary for Tesla, opened up the meeting. Applause and cheers interrupted him with his first few words. From the outset, it was clear that the audience was supportive of the company and the issues to be discussed at the meeting. There were no opposing sentiments expressed by the audience at any time of the broadcast.

First, we learned, we would hear about the results of the votes. Second, we would listen to CEO Elon Musk speak.

Robyn Denholm, chair of the Tesla board, came to the podium amidst cheers and dog whistles. She spoke of the “engaged” shareholders who “understand the company” and whose “interests the board is proud to represent.” A sustainable energy economy, she said, requires multiple elements, including artificial intelligence. She noted that the Model Y was the best selling vehicle in 2023. Tesla vehicles, she said amidst cheers, have offset what would be 51 billion pounds of greenhouse gasses from internal combustion engine-powered vehicles.

Denholm’s mention of the release of the Cybertruck received no audience response.

A bit nervous, looking down more than at the audience, Denholm stumbled occasionally over her prepared notes. Sustainability is “more than avoiding emissions” but also understanding the circular economy. She listed Tesla’s forward movement toward a “truly circular economy,” which included water savings in the vehicle manufacturing process. She noted that, “not only are you protecting the environment” when you are driving a Tesla, you are also safer than you’d be in other vehicles.

Each employee should “take pride in Tesla’s accomplishments,” she said, and she reminded the shareholders that the “board is listening” to you. She expressed that shareholders are the owners of the company and wanted the shareholders to know that the board keeps its responsibility in mind, such as ethical behavior and corporate government. “I assure you, this is a highly engaged board.” She complimented everyone who ran this year’s proxy campaign, a point to which she received lukewarm applause.

Ehrhart returned to the emcee roll and called the meeting to order. He said the final voting would now take place and that the Cardidio group was supervising the election. Ehrhart read the 7 proposals, and each proposal was accompanied by a 3-minute maximum statement from a proponent of the proposal.

A pre-recorded statement from a designee who supported transitioning each board member’s time of service to one year started out the proposal reviews. Calling Tesla Musk’s “liquid piggyback,” he called for a transition at Tesla from a group of friends and family. “Don’t let him siphon off more from Tesla,” and “vote for number six and seven.” Boos followed his speech.

John Chevedden called in about the need for a simple majority, saying it would “approve shareholder’s rights.” Noting that the board supported this proposal in 2022, he suggested that they should do so again. Chevedden commented that Musk should not “withhold technology” if he is not awarded a $56 billion paycheck, reminding the audience that Musk is not required to spend any particular amount of time at Tesla if the pay package proposal is awarded.

New York State Common Retirement Fund had Kristin Hall talk on behalf of Nea Impact Capital about Proposal 8. Investing solely in companies that work toward a “sustainable future,” Nea was originally pleased with Tesla in its portfolio. Now, however, they find too many Tesla workplace and management problems. “We need employees to work to their top ability,” Hall said, but workplace abuse and harassment “have no place at Tesla.” Such an atmosphere could inhibit Tesla’s ability to attract high quality employees. Lawsuits and class actions in front of Tesla now number in the thousands, she said, and retaliation is all too common.

SOC Investment Group spoke as part of a pre-recorded message. Tejal Patel, executive director at SOC Investment Group, asked that Tesla adopt a proposal that upholds international standards over how conflicts between international and local labor law are resolved. The “rights of workers to collective bargaining” that Tesla agreed to adhere to in 2023 respected local law more than international law, she outlined, referring to alleged Tesla labor rights violations in Germany and Sweden. “Just last month the NLRB” wrote that Tesla refused to recognize worker’s right to organize and, instead, created a workplace that was fraught with conflict.

The request that the Tesla Board issue a report, at reasonable expense and excluding proprietary information, on the health effects and financial and competitive risks associated with electromagnetic radiation and wireless technologies embedded in its vehicles was next. Tesla “should provide results of measured” levels of possible carcinogens. “Companies that provide secondary insurance like Lloyd’s of London” tend not to insure companies who have exceeded acceptable limits. “Hardware and software” could be turned off manually, and the company “could take a similar leadership role” in wireless and non-iodized radiation.

Executive pay plan controversies could be relieved with such “responsible business practices,” like 75% of other companies, according to the proposal’s designee. The “recent ruling” that the Delaware court issued is an example of how the company “fails to build into” its executive compensation and “doubles down” that the current pay structure “is the only” mechanism to compensate its CEO. The controversies that the company currently faces is emblematic of the disconnect between shareholders who wish to “ensure long-term viability.”

Sourcing minerals from deep sea mining is contained within an As You Sow proposal. “We know more about the surface of Mars than we do about the bottom of the sea,” and “we believe” dredging the bottom of the ocean floor “will indiscriminately” release blooms and disrupt deep sea breeding. Tesla’s membership in the OCED protocols is not enough, as it does not reflect a pause in deep sea mining. Many other automakers have already agreed not to engage in deep sea mining. “Even the most ambitious future EV scenarios” could be met without deep sea mining, according to the As You Sow designee. “Committing to a moratorium” will assure shareholders that “Tesla will wait until evidence emerges that deep sea mining will not cause” harm.

The audience erupted in hoots, hollers, and cheers as the voting results were announced. Then the meeting was closed.

Here are the results of the voting:

Elect 2 Directors for a 3 Year term (James Murdock, Kimball Musk) — PASS
Non-Binding Advisory-basis Executive Compensation — PASS
Move Tesla to Texas — PASS
Elon Musk’s Compensation Package — PASS
Appoint PricewaterhouseCoopers as Tesla’s accounting firm — PASS
Reduce Director Terms to 1 Year — PASS
Simple Majority Stockholder Voting — PASS
Annual Report on Anti-Harassment and Discrimination — FAIL
Freedom of Association and Collective Bargaining Policy — FAIL
Report on EM Radiation and Wireless Technologies, and Effects on Humans — FAIL
Adopting targets and reports for sustainability metrics for executive compensation — FAIL
Moratorium on sourcing minerals from deep-sea mining — FAIL