Friday 31 August 2018 2:53 pm

Blackrock voted to remove Elon Musk as Tesla chairman

Jess Clark is a City A.M. news reporter covering private equity and investment.

Jess Clark is a City A.M. news reporter covering private equity and investment.

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Blackrock-managed funds voted in favour of replacing Tesla's billionaire founder Elon Musk with an independent chairman, it revealed yesterday.

Funds run by the New-York based firm backed a shareholder proposal to oust Musk as chairman, its filing with the US Securities and Exchange Commission showed.

More than 86m shares voted against the failed motion, which would not have affected Musk's role as chief executive, at a shareholder meeting in June. Fewer than 17m voted in favour, Reuters reported. 

The move would have seen the role of chairman and chief executive split in a bid to improve corporate oversight at the car company, whose shares have suffered in the wake of Musk's trigger-happy tweeting. 

Tesla said Musk's day-to-day exposure to the business is crucial for the company's success.

Read more: British diver prepares to sue Elon Musk for libel over 'pedo' comment

“Blackrock’s approach to investment stewardship is driven by our fiduciary duties to our clients, the asset owners,” a Blackrock spokeswoman told Reuters.

“Our approach to engaging with companies and proxy voting activities is consistent with our commitment to drive long term shareholder value for our clients.”

Musk came under fire earlier this month when he spooked investors by announcing on Twitter that he was considering taking the company private.

The debate quickly centred on whether Musk had broken any laws in disclosing that the company had "secured funding" for its plans, which would have valued Tesla shares at $420. The US Securities and Exchange Commission (SEC) has issued Tesla with a subpoena over the matter.

However, Tesla announced on Friday that Musk would "no longer pursue a transaction for taking Tesla private".

The billionaire caused more headlines this week by doubling down on his 'pedo guy' comments concerning a British diver involved in the rescue attempt of Thai boys stuck in a cave this summer.

It later emerged that the diver is planning to sue the chief executive for libel.

Read more: Elon Musk launches fresh attack on British diver over 'pedo' comment