Car Industry

Tesla shareholders will vote on replacing Elon Musk as board chairman

If he were outsted by shareholders, he'd be replaced with an independent chairman.

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Elon Musk has been Tesla's chairman of the board since 2004, but if a vote in June goes a certain way, that might change -- however unlikely that may be.

In June, Tesla shareholders will vote to change company policy related to the chairman position -- specifically, whether or not the company should only permit independent directors to hold the chairman position. Musk has been chairman of Tesla since 2004, four years before he also assumed the role of CEO.

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There's an Elon Musk picture to suit every story, I'm tellin' ya.

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According to Bloomberg, the proposal came from Jing Zhao, a Californian who believes Tesla's policy should align with what he called the "prevailing practice" in other markets. The Financial Times noted that, as of 2012, nearly half of S&P 500 companies follow this practice, even though half of that figure featured former CEOs as chairmen. In Europe, most public companies have separate CEOs and chairmen.

Tesla's board isn't, er, on board with the idea. "The board believes that the company's success to date would not have been possible if the board was led by another director lacking Elon Musk's day-to-day exposure to the company's business," the board said in a statement. "In light of the significant future opportunities for growth and the careful execution needed in order for the company to achieve it, the board believes that the company is still best served by Mr. Musk continuing to serve as chairman."

The board further notes their feeling that combining the CEO and chairman roles is "an effective form of leadership for an early-stage company, until it faces increased competition and rapid technological changes," but that time isn't now.

Nearly every company that has a combined CEO and chairman has what's called an independent lead director, including Tesla. The lead director has a fair amount of authority, working closely with the CEO/chairman to ensure the board can do its job to the best of its abilities. They also coordinate with the board's other independent directors, of which Tesla has seven.