Tesla shareholder urges to boot Elon Musk as board chairman
Elon Musk, the head of US electric vehicle producer Tesla, may lose his position as the board’s chairman as one of the firm’s stakeholders submitted a proposal urging the board to hire an independent director.
“Although the current leadership structure, in which the positions of Chairman and CEO are held by one person, could provide an effective leadership for Tesla at the early stage, now in this much more highly competitive and rapidly changing technology industry, it is more and more difficult to oversee Tesla’s business and senior management (especially to minimize any potential conflicts) that may result from combining the positions of CEO and Chairman,” Zhao wrote in his proposal.
Zhao, who is beneficial owner of 12 shares of the Tesla’s common stock, pointed out that Musk’s positions at SolarCity and SpaceX as well as degree of his involvement could trigger conflicts down the road.
The proposal came ahead of the company’s annual meeting that is scheduled for June 5. Elon Musk, who currently serves as chief executive of Tesla and the chairman of its board, owns a 20-percent stake in the company. Musk has held the position of chairman since 2004.
In response to the proposal, the company’s board recommended not to vote for replacing Musk with an independent director. The board also mentioned that Musk already holds senior positions as the chairman of SolarCity and Space X, where he is also the CEO.
“The company’s success to date would not have been possible if the board was led by another director lacking Elon Musk’s day-to-day exposure,” the board wrote in its proxy statement.
For more stories on economy & finance visit RT's business section