BOSTON (Reuters) – Funds run by Fidelity Investments on the part of Tesla Inc (TSLA.O) management on government votes and other controversial items this spring, filings showed on Thursday, and experts said that further support for Tesla CEO Elon Musk could indicate if he looks to take the company privately.
FILE PHOTO: Tesla Motors Inc. Chief Executive Elon Musk pauses at a press conference in Tokyo September 8, 2014. REUTERS / Toru Hanai / File Photo
Fidelity funds that are the best Tesla holders, including Blue Chip Growth Fund, (FBGKX.O) Growth Company Fund (FDGRX.O) and the counterfund (FCNTX.O), all voted as Tesla recommended at two shareholder meetings held in March and June, showed the depots.
In both Tesla meetings, the top proxy advisor Institutional Shareholder Services advised critical votes, stating concerns about Musk's pay and governance independence, among other things. Fidelity & # 39; s voices marked the second set of supporting ballots announced by a top investor in the car manufacturer so far this year.
A spokesperson for Fidelity said the Boston-based firm would not comment on what the votes might suggest about the go-private deal that Musk is looking for. How much backup funds offer, determine how much money Musk needs to raise in his unprecedented attempt to make the business private.
Asked about the voices, Tesla spokesman Dave Arnold remarked that Musk reported in a blog that he would convince some top investors about private and that "our biggest investors over the years were extremely positive for Tesla."
The positive votes of the Fidelity funds on the controversial election items might suggest that their managers are more inclined to support Musk, said Francis Byrd, a corporate governance consultant.
"You might assume that they are some kind of locked up," Byrd said, though he warned that the money would eventually want to see the finances of every deal that Musk brings forward.
A July 24 filing by Scottish Baillie Gifford, the largest owner of Tesla after Musk himself, also showed that it supported Tesla throughout both meetings. A representative of Baillie Gifford declined to comment.
The special meeting in March was held to approve a new compensation package that may be worth $ 2.6 billion for Musk. A submission showed that the plan received support of about 81 percent of the votes cast.
Proxy adviser Institutional Shareholder Services had recommended to vote against the price as too rich. The ISS also recommends voting against two of the three Tesla directors who were elected at the regular meeting in June, concerned about their independence and seats on other boards.
ISS also advised investors to support shareholder proposals, including a proposal that would require an independent chairman. The directors each won at least 89 percent support, a submission showed and the proposal for an independent chair was only supported with about 16 percent of the votes present.
Thursday's submissions gave a rare look at thousands of influential votes that Fidelity has issued at shareholders' meetings this year.
Also noteworthy was that Contrafund, a top shareholder in Facebook Inc (FB.O), supported one of the two proposals at its meeting on 31 May calling for the world's largest social media company to renew its voting structure.
Although neither measure was approved, strong support received from external investors was seen as a reproach to leaders, including CEO Mark Zuckerberg, on their slow response to data privacy concerns.
The submission also showed that Contrafund supported all eight Facebook directors for election, including Zuckerberg.
Spokesmen of Fidelity and Facebook did not respond immediately.
Reporting by Ross Kerber; Edited by Frances Kerry and Dan Grebler