Tesla shareholders are set to vote on Tuesday on whether to remove company founder and CEO Elon Musk from his other role as chairman of the board amid challenges on Wall Street and clashes with the media.
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The vote, which is set to take place at Tesla’s annual shareholder meeting in Mountain View, California, came about through a proposal from shareholder Jing Zhao, who argued that an evolving business climate has made it too difficult for Musk to fill both roles. Zhao is calling on shareholders to approve a measure that would strip Musk of the title and appoint an independent director.
“Although the current leadership structure, in which the positions of Chairman and CEO are held by one person, could provide an effective leadership for Tesla at the early stage, now in this much more highly competitive and rapidly changing technology industry, it is more and more difficult to oversee Tesla's business and senior management (especially to minimize any potential conflicts) that may result from combining the positions of CEO and Chairman,” Zhao wrote in a statement on his proposal.
Tesla shares have fallen about 7% so far this year as the company struggles to meet production benchmarks for the Model 3, its flagship electric sedan. Some Wall Street analysts have argued that Tesla will need to raise cash to meet its goals and develop other car models, though the company has said it does not need to raise more money.
The electric car-maker is also contending with investigations into fatal car accidents involving its vehicles, some of which may have had the company’s “autopilot” technology engaged at the time of the crash. Separately, Musk has repeatedly clashed with media outlets and Wall Street analysts over their coverage of Tesla, including one incident in which he ended a conference call early after what he called a “boneheaded” question.
Aside from the vote on Musk’s future as chairman, shareholders are expected to consider a motion to remove three Tesla directors amid concerns about their qualifications, including Musk’s brother, Kimbal Musk, and James Murdoch, CEO of 21st Century Fox, the parent company of FOX Business.
In addition to his roles, Musk owns about 20% of Tesla’s stock.
Reuters reported that analysts expect Musk to retain his chairmanship and for all three directors to be confirmed. Tesla’s annual meeting will begin at 5:30 p.m. ET.