Glass Lewis recommends vote against Tesla board nominee JB Straubel

4:24 pm Thursday, April 27th, 2023

SAN FRANCISCO (Reuters) – Proxy advisory firm Glass Lewis recommended Tesla Inc shareholders vote against board nominee JB Straubel at the electric carmaker’s annual meeting next month, raising concerns regarding his independence.

Straubel is a co-founder of Tesla and served as its chief technology officer before stepping down in 2019. Straubel has since founded Redwood Materials Inc, a battery recycling and materials company.

“The unwinding of conflicting relationships between former management and board members is more likely to be complete and final after five years,” Glass Lewis said in a report published on Wednesday.

“As such, we do not believe that shareholders should consider this director to be independent at this time.”

Tesla did not immediately respond to Reuters’ request for comment.

Glass Lewis said three of the eight directors at Tesla are either affiliated with the company or are insiders, raising concerns about “its ability to perform its proper oversight role.”

It also recommended Tesla shareholders vote for the re-election of two of its board members, CEO Musk and board chair Robyn Denholm, saying there are not “substantial issues for shareholder concern” about the two.

The proxy advisor also recommended a vote against a shareholder proposal for the company to publish a report on “Key-Person Risk”, which includes succession planning.

Glass Lewis said “requesting that the company publicly disclose the identity of key persons in the succession plan could present a material risk to the company and exacerbate concerns regarding succession planning.”

SOC Investment Group, which works with union pension funds with more than $250 billion in assets, earlier this month urged Tesla shareholders to vote against the election of Straubel, questioning whether he is a strong board member who can “counterbalance” Elon Musk’s controversial behavior.

The group said the dearth of Tesla’s board independence has resulted in poor oversight of Musk, who is “overcommitted” to his other ventures like SpaceX and Twitter.

(Reporting by Hyunjoo Jin, Editing by Nick Zieminski)