SEC clears Tesla-crafted auto-vote plan for wide use, worrying activists
TSLA•The SEC approved Tesla’s plan allowing companies to automatically cast retail investors’ proxy votes in line with management, and said it applies to any issuer. Tesla said it spent more than $2 million soliciting retail votes at its two most recent annual meetings.
1. SEC approves voting plan
The SEC’s Division of Corporation Finance approved Tesla’s voluntary retail voting program, which lets investors opt to have their proxy votes cast automatically in line with management. The SEC official who responded said the action applies to any other issuer.
2. Activists raise concerns
Shareholder activists said the program could diminish their influence. Investor James McRitchie called the change “blatantly one-sided” and said shareholders should be able to choose among priorities such as climate protection or limiting executive pay.
3. Participation and costs
The plan aims to increase retail investor participation in corporate elections, which is around 30%, compared with 77% for institutional investors. Tesla said it spent more than $2 million soliciting retail votes at its two most recent annual meetings, including one seeking support for CEO Elon Musk’s pay package.
