Advisers join forces in bid to oust Tesla chairwoman
Proxy adviser Glass Lewis has joined ISS in recommending that investors vote against the re-election of Robyn Denholm as chairwoman of Tesla’s board.
Glass Lewis said it was concern was related to corporate governance, due to an insurance arrangement with chief executive Elon Musk after Tesla’s decision to not renew its directors and officers’ liability policy.
Musk had agreed to personally provide coverage to such a policy for a year, arguing those provided by other insurers charged high premiums, Tesla disclosed in a regulatory filing in April.
“We are concerned that this D&O arrangement gives the company’s independent directors a direct, personal financial dependency upon the CEO they are tasked with overseeing,” Glass Lewis said.
It recommended voting against Denholm as she heads the audit committee which voted to approve the policy.
Earlier this week fellow proxy adviser Institutional Shareholder Services (ISS) said it opposed Denholm’s re-election based on concerns regarding her leadership of the firm. Among its reasons were high compensation awarded to directors, and a steep rise in share pledging by certain Tesla directors and executives under her tenure.
A director at Tesla for six years, Denholm was made chairwoman in 2018 after Musk was forced out of the position as part of a deal agreed with US regulators. He remains under strict governance by Tesla’s board.
Before taking the role, she headed up Australian telecoms giant Telstra as its chief operating officer. Denholm had recently been made its chief financial officer, but quit five weeks into the job to move to Tesla.
Tesla’s annual general meeting is scheduled for 7 July. A spokesperson for Tesla did not immediately respond to a request for comment.