Tesla CEO Elon Musk is expected to take the stage Tuesday for the company’s annual shareholder meeting following a volatile year that saw swings between profitability and wider-than-expected losses, production goals met and deliveries milestones missed, and a securities fraud charge, and subsequent settlement, with the SEC.
The board, like the company it governs, has also undergone changes in the past 12 months. In December, Tesla appointed two independent board members, Oracle founder, chairman and CTO Larry Ellison and Walgreens executive Kathleen Wilson-Thompson. Four months later, Tesla announced in regulator filings, that was reducing the board by more than one-third, to seven directors. Brad Buss, Linda Johnson Rice, Steve Jurvetson and Antonio Gracias will not stand for re-election once their terms end.
Like its earnings calls, Tesla shareholder meetings are rarely boring. If the past is a guide, the event will be run like an informal town hall meeting with Musk fielding questions from the crowd of shareholders. There will also be the requisite corporate governance duties to complete.
First, the basics. Tesla shareholder meeting is scheduled to begin at 2:30 p.m. Tuesday at the Computer History Museum in Mountain View, Calif.
You can watch the livestream via the company’s website. Or here on this YouTube channel:
While it’s impossible to predict precisely what Musk will talk about on stage, we do know there are eight items on the agenda that shareholders have been asked to voted on. The first six proposals are from Tesla. The company recommended approving the six proposals
- To re-elect directors Ira Ehrenpreis and Wilson-Thompson for a term of three years. If proposal 5, listed below, is approved, the terms will be two years.
- To approve the Tesla 2019 equity incentive plan, which would give the company the ability to issue 12.5 million new shares. Tesla wants to continue issuing stock as compensation for employees and executives. However, there is some concern from Institutional Shareholder Services, a shareholder advisory service, that this will dilute shareholders’ equity.
- To approve the Tesla 2019 Employee Stock Purchase Plan. This would continue a plan already in place that lets employees purchase stock through payroll deductions at the end of consecutive, non-overlapping six-month offering periods.
- To approve and adopt amendments to Tesla’s certificate of incorporation and bylaws to eliminate applicable supermajority voting requirements. Basically, this would mean that Tesla wouldn’t need a supermajority vote (at least 66% of the voting power of all outstanding shares) to amend its governing documents.
- To approve an amendment to our certificate of incorporation to reduce director terms from three years to two years.
- To ratify the appointment of PricewaterhouseCoopers as Tesla’s independent registered public accounting firm for the fiscal year ending December 31, 2019.
The remaining two are stockholder proposals, both of which Tesla is against.
- Jing Zhao, who owns 12 shares of Tesla stock, submitted a proposal to form a public policy committee to oversee policies including human rights, environment, domestic governmental regulations, foreign affairs and international relations affecting the company’s business.
- James McRitchie, who owns 90 shares of Tesla stock, proposes simple majority voting provisions for governing documents and eliminate the current supermajority voting requirements. Tesla is recommending voting for its own supermajority elimination proposal.
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