Tesla Shareholders Meeting Almost Saw Elon Musk Stripped of Chairman Title
In the wake of several high profile crashes and frustrating production schedules, this year's annual Tesla shareholders' meeting was slightly more tense than ones before it.
One of the first orders of business at the Mountain View, California meeting was a vote to determine whether Tesla Motors would keep its founder Elon Musk in as chairman of the board.
The board ultimately voted in favor of Musk, which many analysts have noted is a vote of confidence in both Musk's leadership and Tesla as a company.
Musk appeared on stage visibly shaken with a quiver in his voice. He called the last six months of Tesla production "the most excruciating hellish several months that we've ever had." The statement echoed what the executive had said in previous meetings about being in "production hell" for Model 3 units.
However, he gave the shareholders some good news. Musk told them it was "extremely likely" Tesla would hit a 5,000 car/week production rate of its Model 3. He also announced that Tesla would soon produce more batteries at the Gigafactory in Nevada than all other vehicle companies combined -- even against international car manufacturers.
While the production increases mentioned by Musk seem promising to some, it was not enough for other members of the board. Months of delayed Model 3 production and dropping stocks
Musk identified one of the biggest problems with Model 3's manufacturing wasn't from humans but from automating deceptively simple human tasks.
“We’re confident we know how to address them and we are addressing them,” Musk said about the issues. “One of the biggest mistakes we made was trying to automate things that are super easy for a person to do, but super hard for a robot to do.”
The board member in question who proposed removing Musk from his position was Jing Zhao. Zhao noted Musk kept busy with several other companies. (Musk is heavily involved in both SpaceX and The Boring Company, of which he is the founder and CEO of both.) Zhao's proposal noted the multi-company CEO could simply be spread too thin for the benefit of Tesla.
“Although the current leadership structure, in which the positions of Chairman and CEO are held by one person, could provide an effective leadership for Tesla at the early stage, now in this much more highly competitive and rapidly changing technology industry, it is more and more difficult to oversee Tesla’s business and senior management (especially to minimize any potential conflicts) that may result from combining the positions of CEO and Chairman,” Zhao wrote in his proposal.
Zhao's proposal certainly sparked discussion amongst the other shareholders. The meeting also determined whether or not Kimbal Musk -- Elon's brother -- would remain with the company's board, alongside investor Antonio Gracias and Twenty-First Century Fox executive James Murdoch. All three men were in question as to their ability to keep Musk focused on Tesla and its projects. The shareholders ultimately voted to keep the three men on the board of directors.