Daily Management Review

Elon Musk Fends Off A Call To Strike Him Down From Role Of Chairman Of Tesla


06/06/2018




During the process of election of three directors to the board of Tesla, its founder and CEO Elon Musk almost lost out to an effort to remove him from a key role at the company.
 
Removing Musk from the role as the chairman of the company was attempted by one investor.
 
These two positions are often held by a single person in US companies which is not the case in some other countries such as the UK.
 
The proposal to remove Musk was voted down during the company’s annual meeting in Mountain View, California, on Tuesday.
 
Musk said that the meeting was used by the company to make a revelation about its latest "gigafactory" is to be built in Shanghai and an announcement about the Chinese factory would be followed "really soon".
 
For Musk, who holds about 20% of the stake at Tesla, this attempt to remove him from the role of chairmanship was the biggest challenge that he has faced yet in relation to his control over the company.
 
There are some investors who are worried about the problems that the company is facing to hasten the production of the Model 3 car which is the more affordable of the models produced by the company and one that is crucial for the future of the company and its long-term profitability.
 
The aim of the company in achieving a production target of 5000 Model 3 cars in a week was "quite likely" by the end of this month because about 3500 cars were being produced by the production lines of the company now, Musk said.
 
"This is the most excruciating hellish several months I've ever had... but I think we're getting there," he told investors.
 
"At Tesla we build our cars with love," Mr Musk said, visibly moved. "At a lot of other companies, they're built by marketing or the finance department and there's no soul. We're not perfect, but we pour our heart and soul into it and we really care."
 
The investor that sought to vote down three Tesla directors who allegedly did not have adequate qualifications or independence was CtW Investment Group.
 
Call for the separation of the role of the CEO and the chairman of the company and not relecting the three directors was given by CtW, along with proxy firms Glass Lewis and Institutional Shareholder Services (ISS)..
 
The company on the other hand had recommended the shareholders to vote for Musk continuing with the twin roles and for the re-election of the three directors because they were qualified to continue. 
 
Musk was criticized last month after he refused to answer questions form analysts in relation to the finances of the company. Musk had at that time commented: "boring bonehead questions are not cool".
 
(Source:www.bbc.com)






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