Tesla's directors have nominated Ira Ehrenpreis, the second-longest serving board member after Kimbal Musk, and Kathleen Wilson-Thompson for re-election to the board. If re-elected, which is likely, they will serve for three years, as is the board's current structure. However, if a proposal to reduce director terms to two years is successful, they will serve the shorter amount of time.
A major shareholder advisory service is urging investors to vote against the nomination of Ehrenpreis, due to Tesla's skyrocketing equity awards.
"Tesla does not have traditional incentive programs and, while no NEOs received bonuses in 2018, equity awards are sizable and lack performance vesting conditions,' Institutional Shareholder Services, or ISS, said in a May report.
"Investors increasingly expect at least a meaningful portion of long-term incentives be tied to pre-set, disclosed forward-looking performance goals. Concerns are also raised regarding the magnitude of grants to other NEOs, as all but one of the NEOs received 2018 pay in excess of the median CEO in the ISS-selected peer group."
"While these concerns would normally warrant an adverse recommendation for the advisory compensation proposal, the company has adopted a triennial say-on-pay frequency and will not present the proposal again until 2020," ISS continued. "In the absence of a say-on-pay proposal on the ballot, shareholders are advised to vote against compensation committee member Ira Ehrenpreis."
Glass-Lewis, the other major proxy advisor, does not have the same concerns about Ehrenpreis' re-election and recommends a "for" vote on the proposal. Tesla's board of directors also recommends a "for" vote.
Both Tesla and the proxy advisors recommend director Kathleen Wilson-Thompson for re-election.