Lisi Niesner/REUTERS
Tesla investors have some proposals for the company, but at least 11 of those won’t be discussed at the coming shareholder meeting in November.
Business Insider reviewed a dozen shareholder proposals submitted ahead of the July 31 deadline that some shareholders would like to discuss with Tesla’s board.
The 12 proposals come from both state-managed and private funds and ask Tesla to commit to a range of sustainability and accountability measures.
Tesla’s November 6 meeting is the company’s first since the heightened scrutiny of its CEO, Elon Musk, over his involvement with DOGE, followed by a public falling out with President Donald Trump and his announcement of a new political party.
The EV giant is also facing declining sales over the past two quarters, and its share price has fallen more than 30% since its peak in December 2024.
It is not unusual for shareholder proposals to be rejected ahead of a meeting.
Shareholder proposals only appear on the Securities and Exchange Commission docket whenever the company files a “no-action” request to the SEC, which the SEC then reviews and either concurs with the company or allows it to proceed. There are several reasons the SEC may concur with the “no-action” request, including economic relevance, false statements, or others.
Business Insider viewed 11 proposals that Tesla requested the SEC to exclude from its November meeting agenda. One proposal that was accepted and will be put to a vote was shared with Business Insider by Thomas DiNapoli, the New York State Comptroller. Tesla opposes it.
“This AGM is an opportunity for Tesla’s board to restore our confidence in its ability to redress the damage done,” Kevin Thomas, CEO of Shareholder Association for Research and Education, told Business Insider, referring to the annual general meeting. SHARE is a Canadian organization that promotes responsible investment and shareholder engagement. Thomas submitted a proposal on behalf of a client named Richard Krieger. Tesla rejected the proposal.
Tesla did not respond to a request for comment from Business Insider.
The proposals focus on accountability mechanisms
Based on SEC rules that apply to all public companies, shareholders are eligible to submit proposals as long as they have held more than $2,000 worth of shares continuously for three years, more than $15,000 worth of shares continuously for two years, or at least $25,000 worth of shares for one year. The shareholder must also submit a written intent to continue to hold eligible amounts through the date of the shareholder meeting.
DiNapoli, who oversees the New York State Common Retirement Fund, which owned more than $1 billion worth of Tesla shares as of December 2024, showed Business Insider his proposal on ensuring that all shareholders have equal rights to sue Tesla.
The proposal is in response to a company bylaw limiting derivative lawsuits to shareholders with more than 3% in stakes, which DiNapoli told Business Insider violates “basic tenets of good corporate governance.”
His proposal was accepted, but a spokesperson from his office told Business Insider that Tesla opposes the measure itself.
A company is entitled to ask the SEC for permission to exclude a shareholder proposal, but the shareholder can appeal to the SEC to obtain a non-binding ruling on whether the agency agrees with the exclusion of said proposal.
Among those rejected are proposals that:
- Ask Tesla to disclose how many veterans it hires,
- Pledge to use AI in a way that supports renewable energy,
- Not to engage in deep-sea mineral mining,
- Align business strategy with the Paris Climate Agreement,
- Look into sustainable tires,
- Ensure workplace rights in Tesla’s factories, such as the freedom to unionize (the proposal submitted by SHARE on behalf of Krieger),
- Ask for an annual report to assess the effectiveness of the company’s antidiscrimination efforts,
- Increasing oversight on Tesla’s HR practice,
- Issue a report on how the company plans to reduce its emissions,
- Disclose all monetary and non-monetary contributions used to influence elections,
- Disclose how diversity and sustainability goals relate to bonuses or increased compensation among executives.
As for Musk, the CEO wants Tesla to continue to invest in xAI and will put the matter to a shareholder vote.
Musk (and his pay package) will likely be a topic of discussion at the meeting.
Shareholders, even those bullish on Tesla, have expressed frustration with the CEO in recent months.
Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, manages between $60 and $70 million worth of Tesla shares.
“Tesla still makes the best EVs, but nobody on the board seems to want to address the fact that everybody hates Elon and won’t buy the cars,” Gerber told Business Insider. “I see Tesla developing their cabs in scale, and I have to ask: do people really need more ride-hailing options, and do we see a future where people forsake car ownership?”
“Who’s going to take Elon’s cab if they’re out protesting in front of a diner?” Gerber added, referencing the new Tesla diner Musk opened in West Hollywood.
Musk has his defenders. Christopher Tsai, the Chief Investment Officer of Tsai Capital, which owns around $23 million worth of Tesla shares, told BI that he sees Musk as “the equivalent of Einstein” and supports an investment in xAI. He said he would like to see the CEO work on solidifying the position against “activist shareholders.”
“It would be a shame for Elon not to remain at the helm of Tesla because he has the ability to contribute so much to shareholders,” Tsai added. “That being said, I would just prefer less involvement in government so that he has even more time to spend on his companies.”
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