Tesla shareholders largely follow board recommendations at annual meeting

Aug 4 (Reuters) – Tesla Inc shareholders (TSLA.O) voted for the board’s recommendations on most issues at the company’s annual meeting on Thursday, including director re-election, l approval of a stock split, while rejecting proposals focused on the environment and governance.

Votes on three of the 13 proposals fell short of the board’s recommendations, according to preliminary tallies presented at the annual shareholder meeting in Austin, Texas.

Despite board opposition, shareholders passed an advisory proposal that would increase investors’ ability to appoint directors.

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Two board proposals — reducing director terms to two years and eliminating supermajority requirements — failed to receive the supermajorities needed to pass.

Dressed in black, chief executive Elon Musk heavily influenced the vote and addressed a cheering crowd after the vote. He owns 15.6% of Tesla, according to Refinitiv data, after selling millions of shares last year. Read more

Investors approved a three-for-one stock split. Although a split does not affect a company’s fundamentals, it could support the share price by making it easier for investors to own shares.

Shareholder proposals that failed included those arguing for approval of the right of employees to form a union, asking the company to report annually on its efforts to prevent racial discrimination and sexual harassment, as well as to report on water-related risks.

A proposal asking directors to allow large, long-term shareholders or groups holding at least 3% of the shares to appoint directors, overcame objections from the board. The board previously said a proposal like this could create opportunities for special interests to distort Tesla’s plans.

Musk said the company aims to reach a production rate of 2 million vehicles per year by the end of 2022 and will continue to build factories.

Tesla has factories in California and Shanghai and sets up two more in Austin, Texas and Berlin. Musk said Tesla may be able to announce an additional factory this year and expects to eventually have 10 to 12 so-called gigafactories.

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Reporting by Ankur Banerjee and Akash Sriram in Bengaluru; additional reporting by Peter Henderson in Oakland and Kevin Krolicki in Detroit; Editing by Anil D’Silva

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