Tesla shareholders will vote Thursday on proposals to force the electric car maker to be more transparent and accountable in its dealings with its employees, just days after a jury ordered the company to pay $ 137 million to a former worker who claimed to have been subjected to racism.
The votes will take place at the company’s annual meeting of shareholders, where some investors also hope to oust two directors chosen by management – James Murdoch, the former executive of 21st Century Fox, and Kimbal Musk, the director’s brother. Tesla General Elon Musk.
If any of those efforts were to succeed, it would be a big rebuke to Tesla, the dominant maker of electric cars and a Wall Street phenomenon, and Mr. Musk’s control over the company. Tesla is by far the most valuable automaker in the world and its stocks have a dedicated following among professional and individual investors.
Activist shareholders have submitted five proposals to force Tesla to disclose more information about its efforts to diversify its workforce, how it handles employee conflict and its human rights record. The proposals also include calls for more oversight on how Tesla manages employees and to require directors to show up every year, instead of every three years.
Tesla’s board opposes all of these measures and has encouraged investors to re-elect Mr. Murdoch and Kimbal Musk.
On Monday, a federal jury dealt Tesla a blow by siding with Owen Diaz, a former entrepreneur who said he suffered repeated racist harassment while working at Tesla’s factory in Fremont, Calif. , in 2015 and 2016. The jury ordered Tesla to pay Mr. Diaz. $ 137 million. Tesla faces similar charges from dozens of other people in a class action lawsuit.
According to a proposal from Calvert Research and Management, a company that focuses on responsible investing and owned by Morgan Stanley, Tesla should publish annual reports on its diversity and inclusion efforts.
Another proposal, from Nia Impact Capital, which owns less than 1,000 Tesla shares, would force the automaker to publish a report on its practice of using binding arbitration to resolve employee disputes. The practice, Nia argued in its proposal, poses “a long-term risk” to Tesla and can make it more difficult for companies to identify and tackle widespread discrimination.
Separately, ISS, a company that advises investors on shareholder votes and corporate governance matters, opposed the election of Mr. Murdoch and Kimbal Musk because it claims the board of directors does not has not justified the remuneration it pays to some of its members, including nearly $ 6. million dollars last year to Robyn Denholm, who chairs the board of directors, and over $ 9 million to Hiromichi Mizuno, mostly in the form of stock option awards.
While Mr. Murdoch only received $ 32,500 for serving on the board last year and Mr. Musk received $ 20,000, the amounts paid to other members are much higher than in the large similar businesses, according to ISS. Since Mr. Murdoch and Mr. Musk are the only members standing for election, they should be denied the opportunity to continue serving on the board, ISS said.
“As a result, support is not guaranteed for directors responsible for approving director compensation,” the company said in a note to clients last month.
Mr. Musk and Mr. Murdoch own shares and options in the company that are worth hundreds of millions of dollars at the current share price, according to Tesla’s latest proxy filing with the Securities and Exchange Commission.
Tesla’s board has said the pair are expected to stay. Mr. Murdoch provides the company with in-depth management experience, knowledge of international markets and experience in adopting new technologies, he said in a securities filing. Mr. Musk brings experience in the retail and consumer markets and technology companies. Mr. Murdoch has served on the Tesla Board of Directors since 2017 and Kimbal Musk has been a member since 2004.
Pierre Eavis contributed reports.