Figure: Tesla Co-Founder and CEO Elon
On May 29, according to foreign media reports, on Thursday, local time, Tesla, the electric vehicle manufacturer, submitted a power of attorney to the securities and Exchange Commission (SEC), announcing that the company would hold the 2020 annual shareholders' meeting at 2:30 p.m. Pacific time on July 7, 2020 at the computer history Museum in mountain view, California, U.S.A. Tesla outlined seven key proposals to be voted on by its shareholders, including voting on whether to use paid advertising. Tesla will broadcast the general meeting live online through its website.
The agenda of the Tesla 2020 shareholders' meeting will include the following:
Proposal 1: Tesla proposes to elect three first-level directors for a three-year term or until their respective successors are formally elected and qualified;
Proposal 2: Tesla proposes to approve executive compensation plans on a non-binding basis;
Proposal 3: Tesla proposes to approve the appointment of Pricewaterhouse Coopers as an independent registered public accounting firm of Tesla for the financial year ended December 31, 2020;
Proposal 4: Tesla shareholders' proposal on paid advertising;
Proposal 5: shareholders' proposal on simple majority voting clause in Tesla management document;
Proposal 6: suggestions on employee arbitration report submitted by shareholders;
Proposal 7: proposals made by shareholders on increasing human rights reports.
Tesla said in the document that since the closing date of business on May 15, 2020, shareholders are invited to attend the shareholders' meeting in person and are required to ensure that they have the appropriate evidence of equity as of May 15, 2020. The company will provide entrusted materials to shareholders through the Internet, which reduces the environmental impact and cost, ensures that shareholders have timely access to relevant important information, and calls on shareholders to actively participate in voting.
Although Tesla intends to hold a meeting on July 7,2020, the power of attorney statement draws attention to the continuing changes and uncertainties brought by the new crown epidemic. The company stated that:
For investors who can't attend the event in person, Tesla suggests that they can vote via the Internet, phone or email. The final voting results will be published in form 8-K, which will be submitted to the sec after the general meeting. The document is expected to be available on the SEC's website within four working days of the meeting.
Composition of Tesla's board of directors
At this year's general meeting, shareholders will vote on seven proposals. Among them, Tesla's board of directors put forward three proposals, including the appointment of new directors. Tesla's board of directors is currently composed of 10 members, who are divided into three levels, with staggered terms of three years. Tesla's Charter allows the board of directors to determine the number of directors authorized by resolution, and any increase or decrease in the number of directors will be allocated to these three categories so that each category will be composed of as many directors as possible.
April 2019, Stephen, First Class Directo
The board of directors currently expects to reduce the number of seats on the board of directors to nine after the expiration of ulwittson's term of office at the general meeting of shareholders in 2020. As a result, the election of more than three board seats may not result in the submission of ballots or proxies. The board of directors and the nominating and corporate governance committee will continue to assess the best size and composition of the board to enable it to operate flexibly and effectively while maintaining new ideas, expertise and experience among its members.
At the 2020 shareholders' meeting, three candidates were nominated as first-level directors for a three-year term ending in 2023. On the recommendation of the Nomination and Corporate Governance Committee, the Board has nominated CEO Elon
Musk receives the first performance equity Award
The second proposal is to approve Tesla's executive compensation plan. Tesla continues to focus on building compensation incentives to reward its executives based on performance. Equity awards account for a large proportion of Tesla executives' total compensation, including awards based on achievement of clear and measurable milestones. As the value of these awards increases with the rise of the stock price, executive incentive is closely related to the long-term interests of shareholders. In particular, 2019 is Tesla's annual revenue, year-end cash balance, vehicle production and delivery, energy storage product deployment, international manufacturing operation, model y and cybertruck debut, and the launch of the third generation solar roof, which further laid the foundation for the future.
1) Cash compensation
Musk's base salary has always reflected the minimum wage requirement applicable to California law, and he must pay income tax based on this basic salary. However, he never accepted his own salary. At Musk's request, Tesla has completely eliminated its basic wage income and accruals from May 2019.
2) Historical performance equity Award
Prior to the grant of the stock option in December 2009, musk did not receive any equity compensation for its services for five years. In 2010 and 2011, musk did not receive any equity grants, as the compensation committee felt that the existing awards he had given in December 2009 had provided sufficient impetus for him to perform his duties as CEO.
In August 2012, in order to encourage the model s plan launched at that time and the model X and model 3 plans in the plan at that time to continue to achieve long-term success, and further align the executive compensation with the growth of shareholder value, the board of directors issued the 2012 CEO performance award compensation to musk, including the purchase of 5274901 An equity Award for shares of Tesla common stock equal to 5% of the total number of shares outstanding at the time of grant.
The 2012 CEO performance award consists of 10 equal attribution components, each of which requires Tesla to meet (I) certain operational milestones related to model X or model 3 development, total vehicle production or gross margin targets, and (II) a continuous increase in Tesla's market value from $3.2 billion to $4 billion. Nine of the 10 ownership parts and 10 operational milestones have met the market capitalization conditions, so nine of the 10 parts under the 2012 CEO performance award have been exercised. As of the date of this power of attorney, only one operation milestone that requires gross margin to reach 30% or more for four consecutive quarters has not been achieved.
Prior to 2018, mask's only additional equity award was related to certain non-material awards granted in 2013 under the patent incentive program generally available to Tesla employees.
3) 2018 CEO performance award
At the beginning of 2017, after helping Tesla to increase its market value to US $55 billion in just over five years, the 2012 CEO performance award will be substantially completed. The independent members of Tesla's board of directors began to have a preliminary discussion on how to continue to motivate musk to lead Tesla to complete the next stage of development. In January 2018, under the leadership of the compensation committee, after more than six months of careful analysis, with the participation of each member of the independent board of directors, with the help of compensation, a national compensation consulting company, and after contact and feedback with the largest institutional shareholders, the board of directors issued the 2018 CEO performance award to musk.
The 2018 CEO performance award includes a 10-year maximum stock option to purchase 20264042 shares of Tesla common stock, with an average allocation of 12 equal parts, each equal to 1% of the issued and outstanding shares of Tesla common stock at the time of grant, with an exercise price of $350.02 per share. Each of the 12 awarded components of the 2018 CEO performance award is awarded when the board of directors certifies that (I) the market value milestone of the component (the first batch starts at $100 billion, and then increases by $50 billion) and (II) any of the following eight revenue focused or eight profit focused operational milestones have been achieved.
4) First awards worth about $800 million
As of the date of this power of attorney, musk has received the first performance equity award, and he can purchase 1.69 million Tesla shares for $350.02 per share. Because Tesla's total revenue in the past four quarters has exceeded $20 billion and its market value has exceeded $100 billion, this is the first in a series of milestones that Tesla must achieve to achieve the full value of the program.
Tesla closed Thursday at $805.81, meaning the shares were worth about $1.36 billion. But according to the deal, Musk paid $350.02 a share
Musk does not receive a salary at Tesla, which originally classified the pay plan as
The third proposal is to reappoint Pricewaterhouse Coopers LLP as Tesla's auditor. PricewaterhouseCoopers has been auditing Tesla's financial statements since 2005, and its representatives are expected to attend the shareholders' meeting, even issue relevant announcements and answer questions.
Tesla shareholders promote paid advertising
In addition, there are four proposals submitted by several shareholders, all of which were opposed by the Tesla board. Among them, Tesla's board of directors has proposed use of paid advertising, in line with Elon, its chief executive
Over the past few years, Musk has made it clear that he despises advertising. Tesla will not pay celebrities to drive their cars, or even give them a discount, and the carmaker will not pay for advertising, he said. Instead, mr musk says tesla uses advertising spending from other carmakers to improve its products. He said:
The CEO even claims that mainstream media don't like him or Tesla because they don't buy ads from them. While Tesla is largely loyal to these statements, it sometimes moves away from the strategy. Tesla, for example, paid a huge fee to Netease in a large-scale live shopping service in China.
James, a Tesla shareholder in San Diego
Danforth also explained the reasons behind his proposal: advertising became necessary when Tesla announced the closure of retail stores in the first quarter of 2019 and began focusing only on website-based sales. tesla is in an enviable position and is able to obtain the rate of return on advertising investment (ROI) from four sources :1) it is self-evident that advertising can increase brand value, product self-evident ;2) advertising can help mitigate and downplay the large number of FUD initiated by global competitors and critics ().
Tesla's board of Directors recommended that shareholders vote against the proposal, and they wrote a statement of strong opposition:
The board has considered the proposal and believes it is not in Tesla's or our shareholders' best interests. While we welcome feedback from shareholders, we also believe that we have an experienced management team that is best suited to determine Tesla's day-to-day business operations, including our sales and marketing practices and expenses.
In addition, a key premise for proponents of the proposal is based on a clear misunderstanding of Tesla's retail business. Specifically, since the first quarter of 2019, Tesla has made it clear in its statement that we often optimize our retail business, which means closing or reducing retail stores with poor customer flow or sales throughput, and increasing stores in target markets with high customer flow. As a result, our number of net stores remained stable in 2019.
In addition, Tesla is not as focused on online sales as its opponents say. On the contrary, whether a customer places an order at home or at a Tesla store, they do so by visiting the Tesla website. The proponents of the proposal also have no evidence that Tesla's visibility among potential customers is insufficient, and paid advertising (whether at any amount suggested by the proponents or not at all) has not improved this visibility in a way that is beneficial to the company or its shareholders.
In contrast, Tesla delivered a record 367656 vehicles in 2019, a 50% increase over the previous year, without traditional advertising and relatively low marketing costs. Model 3 sales in the United States exceeded the combined sales of BMW 3, Mercedes C, Audi A4 and Lexus.
Tesla's achievements over the past year include Model 3 inclusion in the Consumer Report 2020
Finally, Tesla continues to expand globally through our service and charging infrastructure, as well as through its Shanghai plant, which starts producing cars in 2019, and its Berlin plant, which is under construction. The suggestions of the proponents of the above proposals are based on speculation, but objective factors show that Tesla and our products have growing public awareness and interest without paying for advertising. Therefore, at this time, our management believes that giving up such costs will better serve our customers and shareholders.
Report on compulsory arbitration and human rights
The fifth proposal comes from shareholder James
The final proposal came from sisters of the good shepherd in New York, who wanted Tesla to prepare a report on human rights violations committed by the company it purchased raw materials from. But Tesla believes that the supplier code of conduct and human rights and conflict minerals policy on its website, as well as the company's annual conflict minerals report, which was released on Thursday in 2019, are enough, and recommends that shareholders vote against the proposal. (reviewed by Tencent technology / Jinlu)