Elon Musk faces CRUNCH Tesla vote as stockholders consider SHOCK REMOVAL
The 2018 general meeting will see Tesla stockholders vote on a proposal which could see Musk removed from his position.
Musk co-founded the company in 2003 and is now its CEO. Jing Zhao, who owns 12 Tesla shares, made this proposal.
He explained Musk holding both positions of chairman and CEO may have initially been beneficial to the company but not now the company is maturing.
Mr Zhao said: “An independent chairman of the board of directors is the prevailing practice in the international market, such as in the United Kingdom.
“In the United States, too, many big companies already have or are beginning to have an independent Board Chairman. Tesla should not be exception.”
He went on to say that as Musk has involvement in both SolarCity and SpaceX he cannot be considered an independent chairman. SolarCity is a subsidiary of Tesla that specialises in solar energy services.
SpaceX is a private American aerospace manufacturer and space transportation services founded by Musk in 2002.
Tesla was asked by its shareholders last year to add independent board members, a move it acted on. But asking Mr Musk to give up his position is a step above previous changes.
The board is asking shareholders to vote against this proposal and has released a statement calling for loyalty to Musk.
It said: “The Board believes that 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 to the Company’s business.
“In light of the significant future opportunities for growth and the careful execution needed in order for the Company to achieve it, the Board believes that the Company is still best served by Mr. Musk continuing to serve as Chairman.”
Tesla has experienced a rocky year, missing its Model 3 production target.
The Model 3 is Tesla’s first attempt to design a mid-priced car, and it did originally help the stock rise to an all-time high of $389 in September 2017.
However it has failed to produce 2,500 Model 3 cars per week in the first quarter of this year as was planned.
And March was dubbed Tesla’s worst month ever as the company’s share price shot down almost 25 percent.
This was due to a negative analysis from Citigroup as well as a hedge-fund manager predicting it will be bankrupt within four months.
Tesla share price is currently up by 2.33 percent and lies at $292.26.
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