Tesla AGM: Shareholders reject motions to enhance disclosures on worker rights

The electric vehicle (EV) company hosted its AGM in Austin, Texas, on Thursday.

Stockholders voted to approve chief executive Elon Musk’s $45bn pay package – the largest on record. The pay award was agreed by Tesla’s board pre-pandemic but was blocked earlier this year by a Delaware court. The judge cited concerns over whether the award was necessary to retain Musk at Tesla, and over the company’s approach to financial transparency.

To that end, Musk has sought to relocate the Tesla incorporation from Delaware to Texas. Shareholders this week approved this decision.

Musk and his board had encouraged attendees to vote against a proposal to reduce director terms to one year, but the stockholders voted in favour of this move.

Tesla executives also sought to throw out several advisory motions focused on ethical and sustainability issues – and ultimately proved successful.

Stockholders voted against a proposal that would require Tesla to assess the feasibility of linking executive pay to the delivery of key environmental sustainability targets.

This practice is becoming increasingly common, especially in the UK and the European Union (EU). A 2023 study of 50 large firms headquartered in Europe found that three-quarters link emissions goals to executive pay. Adopters of this approach include Apple and Lego.

Tesla’s AGM also saw votes cast against a proposal for the firm to commit to exclude minerals sourced from deep sea mining from its sourcing. More than 25 countries have stated support for a precautionary pause or outright moratorium on deep-sea mining over concerns about the emerging industry’s potential for negative environmental impacts.

On worker rights, votes were cast to block a proposal that would have required Tesla to adopt a robust freedom of association and collective bargaining policy, essentially supporting the right of workers to unionise.

Additionally blocked was a proposal for tesla to report annually on its efforts to tackle harassment and discrimination in the workplace.

Tesla has repeatedly been accused of failing to tackle racial discrimination among its workforce. It is currently subject to a lawsuit filed by the Equal Employment Opportunity Commission late last year, on behalf of several Black employees at Tesla’s California factory, plus a similar claim from California’s Department of Fair Employment and Housing.

Tesla recently made a payout to a Black man who had been jointly employed by Tesla and two other firms between 2015 and 2016, following a lengthy lawsuit over racist caricatures and hate speech in the workplace.

Related news: GRI kick-starts ‘major’ review of worker rights standards

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