Calls to unseat Muskas Tesla chairman

The largest proxy advisory firm is recommending that investors reject two of Tesla Inc’s board members, while also supporting a proposal to split the role of chairman and chief executive officer — jobs now held by Elon Musk, the public face of the electric-car maker.

By opposing directors Antonio Gracias and James Murdoch, and seeking to install an independent chairman, Institutional Shareholder Services is ratcheting up the pressure on Tesla to reform its nine-member board in the wake of production delays on its mass-market Model 3. “Shareholders would benefit from the strongest form of independent board oversight in the form of an independent chair,” ISS wrote in a report to clients.

Three of Tesla’s nine directors are up for re-election when shareholders meet at their annual gathering June 5: private equity investor Gracias; Murdoch, the CEO of Twenty-First Century Fox and son of media mogul Rupert Murdoch; and Kimbal Musk, a food entrepreneur who is Musk’s younger brother.

ISS is urging a vote against Gracias over concerns about the executive-pay programme’s lack of performance-based elements, and against Murdoch because he is “overboarded” by serving on too many other boards. They believe that a vote for Kimbal Musk is warranted.

"Gracias was previously categorised as independent, but he is now categorised as non-independent because Valor Management Corp, of which Gracias is CEO and majority owner, provided consulting services to Tesla in 2017,” ISS wrote, noting that VMC provided Tesla consulting services relating to "operational optimisation.