Tesla nominates ex-CTO JB Straubel to board of directors
Straubel is deemed a co-founder of Tesla due to his engineering and operations leadership at Tesla from early on. Joining the company in 2004 — well before Elon Musk took the reins as CEO — Straubel oversaw the build-out of Tesla’s first battery factory outside of Reno, among other things.
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If he wins shareholders’ votes, Straubel would replace current Tesla board member Hiromichi Mizuno who does not plan to stand for re-election at the company’s annual shareholder meeting, scheduled for May 16.
Mizuno was previously the chief investment officer Japan’s government pension investment fund and has been a member of the Tesla board since April 2020. Mizuno has been a member of Tesla’s audit committee.
Besides Straubel, Tesla is nominating CEO Elon Musk and chair Robyn Denholm to be re-elected to the board of directors again.
According to its annual report, Tesla is also asking investors to again approve Pricewaterhouse Coopers (PwC) as the company’s auditor and to vote on two different executive compensation-related matters.
Only one shareholder-submitted proxy proposal will be eligible for a vote in May. Stockholders proposed that Tesla provide a “key-person risk” report to investors, identifying how the company would deal with the departure of key executives for any reason, from retirement to an untimely death or disability.
Of particular concern is Tesla’s reliance on CEO Elon Musk. The company has previously and repeatedly stated in financial filings that it is “highly reliant on the services” of Musk.
Since last fall, many Tesla investors have criticized Musk over his decision to sell billions of dollars worth of his Tesla holdings to lead a $44 billion buyout of Twitter. Musk appointed himself and remains CEO of the social media platform, and has authorized high-ranking Tesla employees to work with him there, too.
A Tesla director, James Murdoch, testified in court that Musk has confidentially discussed a potential successor to head the electric vehicle business with him. But some investors are still looking for answers about the key-man risk.
The proxy proposal notes, “According to a 2018 Morgan Stanley report, in 2017 59 S&P 500 CEOs left their companies, and these companies then underperformed the market by 11% in the subsequent 12 months.”
The Tesla board is asking shareholders to vote against the key-person risk report. They wrote in opposition to the proposal, arguing that the disclosures requested by shareholders — like identifying executives most critical to Tesla’s long-term success and who may replace them — would invite competitors to “target and recruit high-value executives away from Tesla.”