Fund backed Tesla change
Funds run by asset management company BlackRock have voted in favour of a recent shareholder proposal that would have required Tesla to replace Elon Musk with an independent chairman.
BlackRock-managed funds voted for a measure requiring the chairman be an independent director, according to BlackRock’s filing with the US Securities and Exchange Commission on Thursday. The proposal, which was defeated, would not have affected Mr Musk’s standing as Tesla’s chief executive.
More than 86m shares voted against the proposal at a shareholder meeting in June, while fewer than 17m voted in favour, Tesla said.
Some corporate governance activists call for the chairman and CEO roles to be split between two people to improve oversight, and the new filing revealed at least one major investor backed such changes at Tesla. BlackRock’s role in backing the proposal was not previously reported.
Mr Musk has been under pressure over the company’s spending and after tweeting on last month that he planned to take the company private, only to abandon the idea by little over a week ago.
Tesla’s board had said the company’s success would not have been possible without Mr Musk’s “day-to-day exposure to the company’s business.”
Yet top proxy adviser Institutional Shareholder Services supported the proposal, citing concerns about Mr Musk’s pay and board independence.
“BlackRock’s approach to investment stewardship is driven by our fiduciary duties to our clients, the asset owners,” a BlackRock spokeswoman said. “Our approach to engaging with companies and proxy voting activities is consistent with our commitment to drive long-term shareholder value for our clients.”
BlackRock funds are a top-10 Tesla stockholder, controlling nearly 6.5m of Tesla’s 170m shares.
BlackRock’s report also showed it voted this year in favour of shareholder proposals at Facebook and Google parent Alphabet to give each shareholders an equal vote on governance matters.
Some companies are structured in a way that gives some shareholders more power than others, regardless of how many shares they hold. BlackRock withheld votes or voted against nearly all management recommendations at Netflix, including an advisory vote on executive pay.
