Tesla Inc. scheduled its shareholders' meeting for October 7 at the Fremont, Calif. Plant, calling for a reduction in the terms of its directors under the proposals the electric automaker will put on the table, the company said late Friday.
One of the proposals is to reduce the term of office of each director from three years to two years. Teslas
The Executive Board currently consists of nine members who are divided into three classes over three-year terms of office.
However, if the proposal is approved, the board of directors will be split into two classes with staggered two-year terms, with directors as evenly distributed among the classes as possible, Tesla said in the filing.
The board would be reduced to eight as Antonio Gracias, a venture capitalist who has served on the Tesla board since 2007, said in 2019 that he would not run for election after his tenure this year.
Tesla's board of directors nominates current board members James Murdoch, News Corp's youngest son
Founders Rupert Murdoch and Chief Executive Elon Musk's brother Kimbal Musk for re-election as Class II directors expiring in 2024. If the term cut is approved, their terms would end in 2023, the company said.
The shortening of the term of office of Tesla board members was in response to a shareholder proposal calling for each board member to be elected for one year.
The two-year term, however, "strikes a fair balance between the long-term interests and the shorter-term accountability of our shareholders at this point," Tesla said.
Tesla shares remained unchanged in after-hours trading after the end of the regular trading day, losing 0.7%. The stock is up 1.6% that year, compared to gains of around 19% for the S&P 500 index.