Elon Musk will stay on as Tesla chairman despite attempted coup by investors after annual meeting vote

Tesla shareholders voted against a proposal to split Musk’s chairman and CEO jobs, and in favour of the re-election of three directors including Fox’s James Murdoch

PUBLISHED : Wednesday, 06 June, 2018, 4:55am
UPDATED : Tuesday, 03 July, 2018, 8:22pm

Elon Musk will stay on as chairman of Tesla despite an attempt by a group of investors to oust him at an annual meeting in northern California on Tuesday.

Tesla shareholders voted against a proposal to split the chairman and chief executive jobs, both of which the billionaire holds, and in favour of the re-election of three directors, whose removal was also demanded by a group of investors.

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Shareholders sided with the board’s recommendations on all agenda items, Todd Maron, Tesla’s general counsel, said, including re-electing Antonio Gracias, Tesla’s lead independent director; Kimbal Musk, a food industry entrepreneur and Elon’s brother; and James Murdoch, CEO of Twenty-First Century Fox Inc.

CtW Investment Group, which works with union pension funds, had urged shareholders to vote against all three directors, arguing that issues including missed Model 3 production targets showed the board has been insufficient in governing Musk, 46, and the company.

But the electric car maker’s stock was also up 1 per cent in extended trade after Musk said Tesla was on track to produce 5,000 Model 3 sedans per week by the end of June, in line with his previously stated goal.

An individual shareholder had also put forth a proposal that would have required an independent chairman, which was backed by proxy advisers Institutional Shareholder Services and Glass Lewis, but was ultimately voted down.

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Tesla has been struggling to ramp up production of its new Model 3 sedan, which is crucial to the company’s long-term profitability. Manufacturing bottlenecks have delayed the delivery of vehicles to customers and deferred much-needed revenue as the company continues to spend heavily on Model 3 production fixes, as well as projects in the pipeline.

Musk, who has insisted the company will not need to raise money this year, has also come under fire for his behaviour during an earnings conference call last month, in which he cut off analysts posing financial queries, rejecting them as “boring, bonehead questions”.

Shares fell as much as 7 per cent after Musk’s snub, evaporating US$2 billion from Tesla’s stock market value.

Musk said on Tuesday that a goal of building 5,000 Model 3s per week by the end of June was “quite likely” as the company’s production lines were now demonstrating the ability to build 3,500 vehicles per week.

“This is the most excruciating hellish several months I’ve ever had... but I think we’re getting there,” Musk said during Tesla’s annual meeting of stockholders in Mountain View, California.

Earlier on Tuesday, The Daily Beast published an insiders’ report on persistent problems at Tesla’s manufacturing plant, including fires and safety issues.

Tuesday’s vote represented the strongest challenge yet to Musk’s grip on the Silicon Valley electric vehicle maker, which also faces production setbacks and expectations by many analysts that it will need to raise new cash.