Tesla Gets SEC Nod for Automatic Retail Voting System
Tesla has been cleared by the SEC to implement its new retail voting system, which allows small investors to automatically vote their shares at every meeting. This change aims to increase participation from individual shareholders, who currently cast only 28% of their shares, compared to 76.6% by institutions. The approval came in the form of a no-action letter, which is a promise from SEC staff not to recommend enforcement if Tesla sticks to its plan.
The system will allow investors to sign up once and have their shares automatically vote with the board at each meeting. They can still receive every voting packet and override any single vote or quit at any time for free. Tesla must send yearly reminders, and investors can also leave contested board elections and mergers out of the automatic vote.
Roninhood CEO Vlad Tenev expressed support for the program, saying it's what ownership should look like when millions of people own shares of a public company. However, not everyone is in favor - New York City Comptroller Mark Levine called ExxonMobil's version of the system a 'blank check' for the board's recommendations.