“It’s not a crime, however, to fail to have one, and there is no particular penalty for waiting until a shareholder demands one,” he said. Calling Tesla’s delay “illegal” would be misleading, he explained.
However, it’s “certainly not normal to not hold a meeting within 13 months,” said Coates. “Usually it’s small and under-resourced or distressed companies that fail to do so,” he said.
Following the announcement of the meeting date, a few of Tesla’s investors were underwhelmed.
“The basic corporate governance rules are not optional; they are fundamental protections for shareholders and public markets,” said Lander.
“It’s time he stepped aside,” Pinsley told Fortune. “His growing entanglement in politics, including his flirtation with launching a new political party, makes Tesla a proxy for ideological battles rather than a company focused on serving its workers or customers.”
Pinsley said Tesla “benefits enormously” from simply being part of the S&P 500, meaning index funds are compelled to keep investing in the stock. It creates artificial demand that is largely unrelated to fundamentals such as revenue, innovation, or governance, he said.
“I understand the long-term promise of autonomous taxis,” said Pinsley. “However, we’re still years away from them generating significant revenue, so the [price-to-earnings ratio] remains way out of whack with the underlying fundamentals.”
Plus, Tesla has become a lightning rod, he said, more divisive than visionary, which is a shame for a company that once held real promise to shape society, Pinsley added.
“Tesla isn’t riding on innovation right now, it’s riding on inertia,” he said. “Its place in the S&P 500 keeps demand for its stock artificially high, regardless of performance.”
