What is the significance of the new 2019 Equity Incentive Plan?

The 2019 Equity Incentive Plan, approved by stockholders, replaces the previous 2010 plan. It allows Tesla to grant equity awards (like stock options and RSUs) for up to 12,500,000 shares, plus any unused shares from the terminated 2010 plan. This provides Tesla with a key tool for attracting, retaining, and incentivizing its employees, directors, and consultants with equity compensation.

What are the key features of the 2019 Employee Stock Purchase Plan (ESPP)?

The 2019 ESPP, also approved by stockholders, allows eligible employees to purchase Tesla's common stock at a discount through payroll deductions over six-month offering periods. A total of 7,500,000 shares are available under this plan, with the first offering period anticipated to start in September 2019. This plan offers employees a way to invest in the company and benefit from potential stock appreciation.

Why did the proposals to eliminate supermajority voting and shorten director terms fail?

Although these management proposals received overwhelming support from the shares that were voted (around 99.5% and 99.6% approval, respectively), they failed because they did not meet the required threshold of at least two-thirds (66 2/3%) of the total outstanding shares of Common Stock. This indicates that while the majority of shareholders present and voting were in favor, the overall participation of outstanding shares did not meet the stringent requirement for amending the company's charter or bylaws.

What is the implication of ratifying PricewaterhouseCoopers LLP as the auditor?

The ratification of PricewaterhouseCoopers LLP as Tesla's independent auditor for fiscal year 2019 confirms the company's commitment to financial transparency and compliance. This is a standard procedural vote at annual meetings, providing assurance to investors that an independent firm will audit the company's financial statements.

TSLA 8-K: Leadership Changes & Shareholder Matters

Summary

This 8-K filing from Tesla, Inc. (TSLA) on June 11, 2019, primarily details the outcomes of its 2019 Annual Stockholder Meeting held on June 10, 2019. The most significant developments for investors are the stockholder approval of the "2019 Equity Incentive Plan" and the "2019 Employee Stock Purchase Plan (ESPP)". The 2019 Equity Incentive Plan replaces the previous 2010 Plan and allows for the issuance of up to 12,500,000 shares, plus unused shares from the prior plan. The 2019 ESPP enables employees to purchase up to 7,500,000 shares through payroll deductions starting in September 2019. Additionally, the filing reports the election of two directors, Ira Ehrenpreis and Kathleen Wilson-Thompson, and the ratification of PricewaterhouseCoopers LLP as the independent auditor. Notably, two management proposals aimed at simplifying corporate governance – eliminating supermajority voting requirements and reducing director terms from three to two years – failed to receive the necessary majority of outstanding shares for approval, despite overwhelming support from shares voted.

Key Highlights

1Stockholder approval of the 2019 Equity Incentive Plan, authorizing up to 12,500,000 shares for equity awards.
2Termination of the 2010 Equity Incentive Plan and its replacement by the new 2019 Plan.
3Stockholder approval of the 2019 Employee Stock Purchase Plan (ESPP), allowing employees to purchase up to 7,500,000 shares.
4The first offering period for the 2019 ESPP is expected to begin in September 2019.
5Election of Ira Ehrenpreis and Kathleen Wilson-Thompson as Class III directors.
6Ratification of PricewaterhouseCoopers LLP as Tesla's independent registered public accounting firm for fiscal year 2019.
7Failure of management proposals to eliminate supermajority voting requirements and reduce director terms, despite high voting support from shares cast.

Tesla, Inc. 8-K Report, Executive Changes (Jun 12, 2019)

Summary

Key Highlights

Frequently Asked Questions