Glass Lewis, a proxy advisory firm, has recommended that Tesla shareholders vote against the nomination of Tesla co-founder and former CTO JB Straubel to the company’s Board of Directors. Straubel’s potential spot as a member of Tesla’s Board will be decided at the upcoming 2023 Cyber Roundup, the company’s annual shareholder meeting.
The proxy advisory firm noted that it has concerns about Straubel’s independence, given his previous role as a co-founder and chief technology officer of Tesla. Straubel stepped down from his post at Tesla in 2019 to start 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. As such, we do not believe that shareholders should consider this director to be independent at this time,” Glass Lewis noted.
The proxy advisory firm also noted that three of the eight members of Tesla’s Board of Directors are already either affiliated with the company or are insiders to a degree. This, according to Glass Lewis, raises concerns about the Board’s capability to “perform its proper oversight role.”
Interestingly enough, the advisory firm recommended voting for the re-election of CEO Musk and board chair Robyn Denholm, as noted in a Reuters report. The firm noted that there are no “substantial issues for shareholder concern” about the two executives. This is quite interesting considering Musk’s volatile nature, which has become more prominent online following his acquisition of social media platform Twitter.
Glass Lewis is not the only firm that is against JB Straubel’s election as a member of Tesla’s Board of Directors. Earlier this month, SOC Investment Group, a firm with over $250 billion in assets, also urged Tesla shareholders to vote against the Tesla co-founder’s election. The group questioned whether Straubel could effectively counterbalance Elon Musk’s controversial behavior. The firm also criticized the lack of Board independence, which reportedly resulted in inadequate oversight of Musk’s commitments to other ventures like SpaceX and Twitter.
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