Tesla Stockholders Urged to Install Independent Chairman

Tesla Inc. should replace two of its board members and relieve CEO Elon Musk of his duties as chairman, proxy advisory giant Institutional Shareholder Service suggests.

ISS joins other proxy firms in urging shareholders to push for an upgraded Tesla board for the sake of improving the electric car company’s operating results and financial condition.

ISS tells its clients that appointing a strong and independent chair would allow Musk and his management team to focus on fixing the company’s chronic production problems. The firm opposes the reelection of board members Antonio Gracias, citing a compensation plan that lacks performance-based criteria, and James Murdoch, because he serves on too many other boards.

The firm also takes a swipe at Musk’s recent confrontational behavior with analysts two weeks ago. It says the board should take steps to help management focus on operations and see to it that “the CEO and other executives do not get distracted by outside business interest or Twitter fights.”