FILE PHOTO: Tesla logo is pictured on a car during electric car E-Rallye Baltica 2019 in Bauska, Latvia July 23, 2019. REUTERS/Ints Kalnins
(Reuters) – Proxy-adviser Glass Lewis has urged Tesla Inc (TSLA.O) investors to vote against re-electing chairwoman Robyn Denholm to the company’s board due to an arrangement with Elon Musk that raises corporate governance concerns, Bloomberg reported on Wednesday.
The advisory firm in a report criticized the electric carmaker’s decision not to renew its directors’ and officers’ liability policy due to high premiums quoted by insurers, according bloom.bg/2C9ClKb to Bloomberg.
Tesla disclosed in April that Musk agreed to personally provide coverage for a year, the Bloomberg report said.
“It is the duty of independent directors to oversee management in the best interests of shareholders,” Bloomberg quoted Glass Lewis as saying in the report.
“We are concerned that this D&O arrangement gives the company’s independent directors a direct, personal financial dependency upon the CEO they are tasked with overseeing,” it added.
Earlier this week, another proxy adviser Institutional Shareholder Services Inc (ISS) opposed Denholm’s re-election on concerns over her leadership and high compensation for directors during her time.
Denholm, the company’s director for nearly six years, has been the chairwoman since November 2018. She is also a member of Tesla’s audit and compensation committee.
Glass Lewis and Tesla did not immediately respond to Reuters’ request for comments.
Reporting by Bhargav Acharya in Bengaluru; editing by Uttaresh.V