Monday, May 27, 2024

Tesla selects co-founder JB Straubel as nominee for board of directors

On Thursday, Tesla Inc announced the nomination of its co-founder and former Chief Technology Officer, JB Straubel, to its board of directors. This move comes amidst concerns expressed by some investors regarding a perceived lack of succession planning at the electric carmaker, which is currently led by Chief Executive Elon Musk.

In addition, Tesla appointed Tom Zhu as Senior Vice President for Automotive Operations, who was responsible for overseeing the construction and operations of the company’s Shanghai factory. This appointment positions him as one of four executive officers at Tesla, alongside Elon Musk, CFO Zachary Kirkhorn, and Powertrain Head Andrew Baglino.

Despite these appointments, some Tesla investors have expressed concerns about Elon Musk’s leadership and recent acquisition of Twitter for $44 billion, which they fear may cause him to become overstretched and distracted from his responsibilities at the carmaker.

Tesla’s stock suffered its largest annual decline last year, as worries over Elon Musk’s Twitter usage and softening demand for electric vehicles in China, the US, and other regions weighed on investor sentiment.

On May 16, Tesla shareholders will vote on an investor proposal that calls for the company to publish a report on “Key-Person Risk,” reflecting concerns that the automaker may rely too heavily on Musk’s leadership. The proposal seeks to identify key personnel, succession plans, and other measures to mitigate the potential loss of these individuals.

However, the board is urging shareholders to vote against the report, citing the potential for “unnecessary competitive harm to Tesla.”

James Murdoch, a Tesla director, stated in court in November that Musk had identified a potential successor to lead the company in recent months, although he did not disclose the individual’s name.

(With inputs from Reuters)

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