By Michael Elkins
Shares of Tesla, Inc. (NASDAQ:TSLA) are down 4.69% in pre-market trading on Thursday after Retail activist shareholder platform Tulipshare called on the electric vehicle company to tie its executive pay to environmental, social and governance (ESG) factors. The activist group said it expects to file a shareholder resolution on the matter for the electric car maker's annual meeting next year.
"The mood of investors is super-ready to support a resolution like ours," Britain-based Tulipshare said. If executive pay were tied to goals like cutting emissions or worker rights, they added, "I can tell you those people will put their effort into solving the problems in the system."
Tulipshare believes that the decision by S&P, Dow Jones Indices last spring to remove Tesla from a widely followed ESG index showed the company faces reputational and legal risks that investors will not tolerate.
Tesla CEO Elon Musk pushed hard against S&P's decision, tweeting in May that "ESG is a scam". However, the company has embraced some ESG trends such as reporting its production and energy consumption and providing workforce demographic data.