Proxy adviser Institutional Shareholder Services Inc (ISS) has urged Tesla Inc shareholders to vote against the re-election of chairwoman Robyn Denholm at the electric automaker’s annual meeting next month.
The firm expressed concerns regarding Denholm’s leadership, mentioning consecutive years of high compensation for directors, without a reasonable rationale, and a steep increase in share pledging by certain Tesla directors and executives, during her reign.
Denholm, a company director for almost six years, has been the chairwoman since November 2018. She is also a member of the company’s audit and compensation committee.
“The significant amount of pledged shares raises concerns regarding the audit committee’s ability to effectively oversee risk at the company,” ISS said.
It said the aggregate number of pledged Tesla shares boosted by 35.6%, or about 4.9 million shares, during 2019, and represented 10.43% of outstanding shares with a value of about $7.9 billion.
“The percentage of outstanding shares that is pledged raise significant issues, which are exacerbated by the high degree of volatility in Tesla’s share price,” ISS said.