Electric car maker Tesla Inc. reported less-than-usual support for two directors at its recent shareholder meeting on Wednesday, and after a court ruling in favor of a temporary employee followed a call to review the company’s use of mandatory arbitration. More support for, which accused Tesla of racial discrimination. .
The votes indicated growing shareholder discontent in the company.
In a securities filing, Tesla said support for a shareholder resolution on how it handles arbitration cases rose to 46% of the vote at its annual meeting last week, up from 27% for a similar proposal in 2020. Both directors also got up for election this year. Less support than last year.
The non-binding resolution on arbitration asked Tesla’s board to study the impact of using mandatory arbitration to resolve workplace complaints of harassment and discrimination. The issue gained more attention after a Tesla contract worker was awarded $137 million by a jury last week over racism at the workplace.
Tesla had opposed the motion, arguing that arbitration could benefit both sides of the dispute. The company did not immediately comment on the shareholder vote.
Other technology companies have withdrawn or eliminated mandatory arbitration, including Uber Technologies Inc. and Google parent Alphabet Inc. In April, nearly half of Goldman Sachs Group Inc. shareholders voted in favor of investigating the bank’s use of mandatory arbitration.
Nia Impact Capital CEO Kristin Hull, who filed the proposal, called the higher support this year “a huge improvement as we educate people about why it matters to build an innovative team with a diverse and inclusive company culture.” Is.”
Tesla CEO Elon Musk owns 23% of Tesla shares, according to his proxy statement, which means the measure would have been withheld from his votes, Hull said.
Another measure involving racial issues garnered majority support with 57% of the vote. The measure, filed by Calvert Research and Management, asked Tesla to report in detail on its diversity and inclusion efforts. Tesla opposed the measure, citing current and future reporting plans.
Wednesday’s filing showed two company directors up for re-election last week, James Murdoch with 70% of the vote, and Elon Musk’s brother Kimbal Musk with 80% of the vote.
Directors of large US companies typically receive 90% or more of the endorsement. At Tesla, “the director nominee should do some heavy thinking about the quality of their oversight and how they/the company can better communicate to the market,” said Francis Bird, corporate governance consultant for Alchemy Strategies Partners.
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