Tesla extends ‘full self-driving’ beta test as proxy group board calls for shakeup

A powerful proxy advisory firm is recommending Tesla Inc. shareholders to vote against two current board members and urge greater corporate accountability.

Meanwhile, despite regulators’ concerns, Tesla is increasing the number of drivers who may request a beta version of its latest “fully self-driving” feature.

A note from Institutional Shareholder Services suggested voting against Kimball Musk, the brother of James Murdoch, the news corporation’s board director, who left the board in 2000, and Elon Musk, the Tesla CEO. ISS expressed concern over the ability of managers to effectively monitor the company’s risks, citing “large-scale equity grants” to managers without justification. The ISS further complained that the board was not adequately responsive to the measures approved by shareholders last year.

The ISS recommends a “yes” vote on shareholders ’proposals to declassify the board, issue a diversified and inclusive report, report on employee arbitration and appoint an independent committee to oversee“ human capital management ”. Tesla opposes board measures.

Tesla’s annual shareholder meeting will be held in October at its factory in Fremont, California. Another proposal, supported by both the ISS and Tesla boards, would reduce the directors’ positions from the current three to two years.

Proposals opposed by Tesla are less likely to pass, even if they win by a majority vote. Elon Musk and others control about 25% of the internal voting power and require shareholder supremacy for big changes. This means that without the support of Kasturi and other insiders, the support of about 90% of the shareholders will have to cancel them.

Tesla is rarely the only company where shareholders do not have much power. Some of the largest and most influential companies in the country, such as Walmart Inc. WMT,
+ 0.28%
And Facebook Inc. FB,
+ 2.02%,
They have complete control over their founders, their families and other insiders.

Technically, Tesla has launched a button on its car dashboard screen over the weekend where owners can request a software upgrade to the full self-driving beta version. According to Tesla’s website, the company will give FSB beta access to users who have a proven record of safe driving, determined by a five-factor score compiled by Tesla.

Despite its name, the full self-driving feature does not make cars fully autonomous, and last week called a major upgrade to the National Transportation Safety Board prematurely, saying Tesla’s use of the term was “misleading and irresponsible.”

Last week, San Francisco transportation authorities also expressed concern about the security of the FSB feature before the software update.

Federal regulators have investigated at least 25 crashes in the past five years involving Tesla autopilot driver-assistance features.

Tesla shares TSLA,
+ 2.75%
About 10% year-to-date, compared to the S&P 500’s SPX
+ 0.15%
About 19% profit.

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