ISS Advises to Vote Against 2 Tesla Directors

Proxy adviser Institutional Shareholder Services (ISS) advised that investors vote against Tesla directors James Murdoch and Antonio Gracias, fueling pressure on the car market regarding their roles on the board.

In addition, ISS supported two proposals from shareholders that will be voted on during the company’s annual meeting to be held on June 5. The proposals include the separation of the current chairman and CEO roles of the carmaker’s founder Elon Musk.

“The complexity of large-scale manufacturing and the challenges of successfully commercializing new technologies and new manufacturing and marketing techniques suggest that shareholders would be better served by having Musk focus on running the company, and allowing an independent director to run the board,” as per the copy of ISS’ recommendations.

The advise by the ISS resonates with those that were made earlier in the week by its competitor Glass Lewis, even though the ISS sided with Tesla and recommend investor vote for the Tesla CEO’s brother and current director Kimbal Musk.

Union-affiliated activist CtW Investment Group has lambasted the 3 Tesla directors up for election this year. The activist group said that the directors were either too close to Elon Musk or unqualified.

On its report, ISS said that Gracia, who is the CEO of Valor Management Corp, was not sufficiently independent for key board committees. The proxy adviser also put to question the concerns over the company’s lack of performance-based elements in its pay plan in recommending the vote against Gracias, who is a compensation committee member.

Meanwhile, ISS also described Murdoch as being “overboard,” because he was serving as the CEO of Twenty-First Century Fox Inc and on other boards.

Further, Steve Jurvetson, who is another Tesla director, is not up for election this year because of the board’s staggered schedule. Since November, Jurvetson has been on leave from the company’s board as he also resigned from venture capital firm Draper Fisher Jurvetson (DFJ) in the wake of an internal DFJ probe into sexual harassment allegation made against him, which he said did not happen.

ISS also wrote that Tesla’s proxy notices Jurvetson’s leave but not the reason behind it. it also said that Tesla’s “shareholders should expect a greater degree of transparency from the company as to the reason he remains on leaves,” as well as his future status.

Meanwhile, Elon Musk has bragged about new bells and whistles to Tesla’s Model 3. He classified the highest end version as a car that rides quickly, smoothly, as well as having the ability to “beat anything in its class.”

Tesla’s CEO took to Twitter the announcement of his work on two separate versions of the car, with dual motor capabilities that are “optimized for power and… for range.”

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