Tesla succession plan, focus on vehicle demand at annual meeting

(Reuters) – Tesla Inc (TSLA.O) CEO Elon Musk will be under pressure to address investor concerns about the lack of a clear successor, slumping demand and delays in some new models when he speaks at the electric carmaker’s annual shareholder meeting. Tuesday.

His commitments to projects like a new AI startup also remain a concern though Musk said he would devote more time to Tesla after announcing that former NBCUniversal advertising chief Linda Yaccarino would succeed him as Twitter CEO.

However, Musk plans to focus on products and technology at the social media company.

He could spend more time with X.AI Corp. He has a passion for AI,” said Gene Munster, Managing Partner at Deepwater Asset Management.

“This is a big X-factor,” Munster said, adding that it remains unclear who Musk will hire to lead the AI ​​startup.

Tesla shares rose 1.7 percent to $169 on Tuesday.

Below are some of the topics that will likely be discussed at the shareholder meeting that begins at 4:00 PM ET.

Succession

Investors will vote on a shareholder proposal for the company to publish a “key person risk” report, reflecting concerns that the automaker relies too much on Musk’s leadership. The proposal seeks to identify key people and develop succession plans.

Musk said at a shareholder meeting last year that he would stay at the automaker as long as he was useful. In November, Tesla CEO James Murdoch testified in court that Musk had identified someone as a potential successor.

Tesla board members have discussed CFO Zach Kerkorn as a possible successor to Musk as CEO, the Wall Street Journal reported last week, citing a person familiar with the matter.

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Board nominees

Investors will also vote to appoint Tesla co-founder and former chief technology officer JB Straubel to the board.

The acting advisory firm Glass Lewis recommended shareholders vote against his appointment, citing concerns about his independence.

Straubel, CEO of Redwood Materials, a battery and materials recycling company, is a potential successor to Musk, according to Deepwater’s Monster.

Shareholders will also vote to re-elect Musk and Chairman Robin Denholm as members of the board.

Proxy advisory firm ISS has recommended voting against Denholm, citing concerns about a lack of scrutiny over the use of Tesla shares as collateral for loans from Musk and his brother Kimbal.

Requests

Investors expect Musk to talk about demand for vehicles against the backdrop of a slowing economy and increased competition.

Musk said in April that the electric car maker would prioritize sales growth over profit after it missed its margin target due to aggressive price cuts.

product pipeline

Tesla may need to update its aging line of products to meet ambitious sales targets.

Musk said last month that he expected a delivery event for the long-delayed Cybertruck pickups in the third quarter.

He did note that there was strong demand for the Cybertruck, but said it would take time for the manufacturing line to move towards a “very radical product.”

Investors are also waiting for details on cheaper Tesla electric cars.

(Reporting by Tanya Jain)

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