(First paragraph prediction, adding context, analyst comment)
Ross Kerber and Hyunju Jin
Oct 13 (Reuters) – Electric vehicle maker Tesla Inc on Wednesday reported lower-than-usual support for the two directors at its recent shareholder meeting and more support for a call to reconsider the company’s use of compulsory arbitration following a court ruling in favor of a temporary employee. who accused Tesla of racial discrimination.
The vote reflects the growing dissatisfaction of shareholders with the company.
Tesla said in its Securities filing that support for a shareholder resolution on how it handles arbitration rose to 46% of the votes cast at its AGM last week, from 27% for a similar proposal in 2020. Both directors nominated for election this year also received less support than last year.
In a non-binding arbitration resolution, Tesla’s board of directors was asked to study the impact of using compulsory arbitration to address complaints of harassment and discrimination in the workplace. The issue has gained more attention after a jury awarded a Tesla employee on contract $ 137 million last week for workplace racism.
Tesla opposed the decision, arguing that arbitration could benefit both parties to the dispute. The company did not immediately comment on the voting of shareholders.
Other tech companies have reduced or eliminated compulsory arbitration, including Uber Technologies Inc and Alphabet Inc., Google’s parent company. In April, almost half of the shareholders of Goldman Sachs Group Inc. voted in favor of considering the use of compulsory arbitration by the bank.
Christine Hull, CEO of Nia Impact Capital, which filed the resolution, called the higher endorsement this year “a huge improvement as we tell people why it is important to build an innovative team with a diverse and inclusive corporate culture.”
According to Hull, Tesla CEO Elon Musk owns 23% of Tesla, which means that this measure was not taken into account by his votes.
Another measure related to racial issues received majority support – 57% of the vote. In this paper, filed by Calvert Research and Management, Tesla asked for a detailed account of his diversity and inclusion efforts. Tesla opposed the measure, citing current and future reporting plans.
Among the company’s two directors to be re-elected last week, James Murdoch received 70% of the votes cast and Kimbal Musk, Elon Musk’s brother, received 80% of the votes cast, according to Wednesday’s report.
The directors of large American companies usually receive 90% or more of the support. At Tesla, “CEO candidates need to seriously consider the quality of their oversight and how they / the company can better communicate it to the market,” said corporate governance consultant Francis Bird of Alchemy Strategies Partners. (Reporting by Ross Kerber and Hyunju Jin; editing by Stephen Coates and David Gregorio)