Tesla investor group wants more independent board, cites Musk ties
By Alexandria Sage
SAN FRANCISCO (Reuters) - An investor group called on Tesla Motors Corp (TSLA.O: Quote) on Tuesday to add two independent directors to its board and separate the roles of chairman and chief executive as it highlighted founder and CEO Elon Musk's dominance of the board in the wake of Tesla's proposed bid for SolarCity.
Musk is also the chairman and largest shareholder of SolarCity Corp (SCTY.O: Quote).
CtW Investment Group, which works with union-based pension funds and holds 200,000 shares of Tesla, in a letter to Silicon Valley-based Tesla, demanded the implementation of five steps it said would remedy Tesla's "underlying governance deficiencies."
In addition to adding two permanent independent directors and separating the chairman and CEO roles, CtW called for two independent directors to form a special committee to review the proposed SolarCity deal; a declassification of the board so that stockholders may have an annual say on the election of all directors; and revision of the corporate governance guidelines to forbid that immediate family members of board members serve concurrently on the board.
Telsa board member Kimbal Musk, who is CEO of Medium Inc, an internet software company based in Boulder, Colorado, is the brother of Elon Musk.
Tesla last week proposed an up to $2.8 billion all-stock acquisition of U.S. solar installer Solar City.
"The fiercely negative reaction to the proposed transaction only highlights the flawed (corporate governance) process and underscores our continuing concern about governance at the company," CtW Executive Director Dieter Waizenegger wrote in the letter.
"We believe the board of directors at Tesla must be restructured in order to insure that stockholder interests are protected during this proposed acquisition and going forward," Continued...