Unofficial: Troop’s Guide to 2022 Tesla Shareholder Proposals

A handy primer on the most important votes at Tesla’s 2022 annual meeting.

Tesla’s annual stockholder meeting — *airhorn sounds* — goes down on August 4. This is the one time each year that regular shareholders have direct say on how the company operates, by way of the proxy statement, a.k.a. a long list of proposals (filed by management and shareholders) for things like director nominations, bylaw changes, and increasingly, policies related to the environment, equality, and transparency.

If you’re a $TSLA holder, it’s quite possible this proxy statement landed in your spam folder. Even if you found it, you probably noticed it’s printed in tiny font and hard-to-read by design. Fear not. We did the homework for you and built a primer on what we think are Tesla’s most important shareholder proposals. After you study up, click here to learn how to vote; the process varies by broker.

If you’d like to join the internet’s hottest shareholder activism community, learn more about Tesla’s proposals, and share your votes, sign up for Troop here. (That’s us!) Happy voting.

Proposal 7: Should Tesla report on workplace harassment and discrimination?

Tesla is currently facing at least 10 lawsuits alleging racial discrimination or sexual harassment in the workplace, including a whopping civil rights claim, the largest of its kind, filed by the California Department of Fair Employment and Housing, based on hundreds of employee complaints. This proposal, filed by Nia Impact Capital, asks Tesla to issue an annual report on the company’s harassment and discrimination disputes. The board recommends voting no (spoiler alert: they recommend voting against all of these) and argues that current policies adequately address workplace equality concerns, despite all the lawsuits.

Proposal 8: Should Tesla report on board diversity?

This proposal, filed by Arjuna Capital, requests a report on the composition of Tesla’s board of directors. It also asks the company to share plans that would help ensure the board’s makeup in the future matches the demographics of its customers. Currently 25% of the board appear to be women and one director is Black; diversity among lower-level leadership is even worse. Tesla’s board says its current nomination and reporting processes are fine and touts that its chairperson is a woman.

Proposal 9: Should Tesla report on the impact of its forced use of arbitration?

At the center of Tesla’s numerous disputes over workplace abuse is the company’s policy of forcing employees to sign arbitration clauses, which prevent them from addressing sexual or racial harassment in open court. This proposal, also filed by Nia Impact Capital, asks Tesla to prepare a report on arbitration’s impact on employees and the brand. It notes that companies like Google and Microsoft have ditched these types of clauses, and Congress recently passed a law invalidating forced arbitration when it comes to sexual harassment. Somehow, Tesla is making the claim that arbitration clauses don’t silence employees or negatively impact workplace culture.

Proposal 10: Should Tesla report on lobbying?

Remember when Elon Musk called ESG a scam? That was inspired by the S&P Dow Jones pulling Tesla from its main ESG index for not publishing enough info on its carbon strategy and business conduct codes. The main measure of political disclosure and corporate accountability, in fact, gives Tesla an F rating. This proposal, filed by the Nathan Cummings Foundation, seeks a comprehensive report on the company’s direct and indirect political influence work, specifically how it reflects Tesla’s support for the Paris Agreement’s goal to limit global warming. The board argues that its political engagement already reflects that mission and that its disclosures are sufficient.

Proposal 11: Should Tesla respect employees’ right to unionize?

The National Labor Relations Board recently ruled that Tesla illegally fired an employee involved in union organizing. The ruling follows years of complaints that the company (and Musk himself) threatens and retaliates against workers who support unionization. This proposal, filed by SHARE, asks the company to adopt policy supporting rights to freedom of association and collective bargaining, and to pledge not to interfere in union organizing. The board claims the company respects these rights already and that its actions “speak for themselves,” supposedly making such a policy unnecessary.

Proposal 12: Should Tesla report on policies to end child labor in its supply chains?

This proposal, filed by Sisters of the Good Shepherd, seeks a comprehensive report on how Tesla sources battery minerals and whether company policies and practices will eradicate child labor from its supply chain. Child labor has been documented extensively at cobalt mines in the Democratic Republic of Congo (where most cobalt comes from), leading Tesla to develop cobalt-free batteries, but that transition is still ongoing. A lawsuit holding the company liable for child deaths in cobalt mines was dismissed last year. The board claims Tesla directly sources cobalt from industrial mines, rather than shadier artisanal mines or middlemen, and that it’s “confident” in its “commitment” to ensuring child labor isn’t part of its supply chain.

Proposal 13: Should Tesla report on the risks of water shortage?

One lesser-known Tesla controversy is how its new gigafactory in Germany has been delayed due to concerns that the facility would exhaust the area’s water supply. Drought conditions and water conflicts also loom over the company’s production centers in central Texas and elsewhere. This proposal, filed by As You Sow, requests a report on the company’s exposure to water risk and its plans to reduce that risk. Tesla currently has an F score from the organization that evaluates water transparency. (Peers like GM and Ford comply with water management reporting standards.) The board says it’s “starting the process” of aligning with the Task Force on Climate-related Financial Disclosures (TFCD) framework.

This shareholder voter guide is by no means comprehensive, and was curated by the Editorial team at Troop to contextualize the topics we deem most pressing for a general audience. This article solely reflects analysis from Troop, and has no connection to Tesla’s operations. This shareholder voter guide does not constitute investment advice. All investors should conduct their own research before investing and voting with their shares.

To read the proxy statement in full, click here.