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Tesla’s board is recommending that shareholders reject a proposal to create an annual report cataloging harassment and discrimination complaints at the automaker because Tesla is “already addressing” these issues.The board does, however, think shareholders should reinstate a $56 billion pay package for CEO Elon Musk after it was rejected by a Delaware judge in January.These issues are two of a dozen proposals shareholders will be asked to vote on at Tesla’s annual meeting on June 13, according to a filing with the US Securities and Exchange Commission.The request for more information on workplace discrimination came from Thomas DiNapoli, New York State Comptroller and trustee of the New York State Common Retirement Fund. A similar request also went out to Wells Fargo and Chipotle. “We selected these companies because of long-standing failures of oversight of the workforce by management and the board,” Mark Johnson, Napoli’s press secretary, said in a statement to Fortune. Tesla has faced “numerous serious allegations of racial or sexual harassment and discrimination,” the shareholder proposal says, including an ongoing class-action lawsuit filed by 6,000 Black workers at Tesla’s Fremont, California, plant.DiNapoli asked Tesla to provide a public report on “the total number of pending harassment and discrimination complaints the company is seeking to resolve,” as well as how much it’s paying to litigate those cases. He also asked for the “retention rates of employees who raise harassment or discrimination concerns,” without disclosing their names.The Tesla board argues that the proposal “would not serve the best interests of Tesla or our stockholders.” Instead of helping improve Tesla’s workplace management, the information requested by DiNapoli would “drive confusion and misunderstanding,” the board says.Tesla does not “tolerate discrimination, harassment, retaliation or any mistreatment of employees in the workplace or work-related situations,” according to the board, which says the company’s training programs ensure “that all employees understand how to create and promote a respectful workplace, assess potential situations sooner and escalate appropriately.”The board rejected several other social and environmental proposals, such as guaranteeing the right for employees to unionize (Tesla sparred with employees who attempted to do so in New York in 2023) and a moratorium on sourcing minerals from deep sea mining. These requests, among others, were filed by various individuals and activist groups.
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It does, however, support giving Musk a hefty payday. In January, a judge found that Musk failed to meet his legal burden of proof to justify the compensation package, which is “the largest potential compensation opportunity ever observed in public markets by multiple orders of magnitude.”The Tesla board is framing that decision as “the Delaware Court second-guess[ing] your decision,” since shareholders approved the pay package in 2018.”Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value,” the board says. “That strikes us — and the many stockholders from whom we already have heard — as fundamentally unfair, and inconsistent with the will of the stockholders who voted for it.”
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