Tesla faces difficult task to win shareholder vote, chair warns

Good morning.

The chair of Tesla Robyn Denholm has told the FT that convincing the electric-car maker’s shareholders to vote on plans to relocate to Texas and back Elon Musk’s $56bn pay deal could be a difficult task.

Denholm has been chair of Tesla since 2018. Ahead of the company’s annual meeting on June 13, she has been encouraging shareholders to vote on the changes which amount to a referendum on the mercurial leadership of the world’s third-richest person.

A vote on Musk’s pay package only requires a simple majority of votes, excluding those owned by Musk and his brother Kimbal. The path to reincorporate in Texas is steeper, requiring a majority of all shares outstanding; those not cast are counted as a “no”.

“It’s like Mount Everest. It’s a huge hill to climb because getting 50 per cent of the shareholders to vote, let alone what they vote for, is quite tough,” Denholm said.

Read more of the FT’s exclusive interview with Denholm here.

Here’s what I’m keeping tabs on today and over the weekend:

• Economic data: Russia has inflation data, the UK publishes insolvency numbers and China is set to report retail sales and industrial output figures.

• Companies: Boeing chair Larry Kellner will step down after the plane maker’s annual meeting today. He is set to be succeeded by Steve Mollenkopf.

• Middle East: US national security adviser Jake Sullivan plans to travel to Saudi Arabia and Israel this weekend, Reuters reported, after friendly fire killed five Israeli soldiers during intense fighting with Hamas, Israel’s military said yesterday.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. US companies have issued €30bn in euro-denominated bonds this year, seeking to take advantage of the continent’s lower borrowing costs. The supply of bonds could reach €85bn, according to Bank of America data. Johnson & Johnson and Booking Holdings are among the companies pursuing multibillion-euro deals. Read more about the so-called reverse Yankee deals here.

2. Reddit has struck a deal with OpenAI to use content from the platform for its artificial intelligence chatbot, sending shares in the social media company up as much as 15 per cent in after-hours trading yesterday. The jump would mean a windfall for OpenAI chief Sam Altman, who held close to 10 per cent of Reddit’s stock ahead of its public listing. Read the full story.

3. Wildfires in Canada’s oil sands region could put 2mn barrels a day of synthetic crude oil at risk. Cooler temperatures have improved conditions, but almost 20,000 hectares of land remain out of control. Alberta, where the oil sands region is located, has experienced 323 wildfires this year as fires become a larger risk to oil production. Read more about the wildfires here.

4. Donald Trump’s defence has cast doubt on Michael Cohen’s reliability as the prosecution’s star witness in the Manhattan “hush money” case. A lawyer for the former president elicited testimony indicating a call allegedly made by Cohen, Trump’s former fixer and personal attorney, to Trump’s bodyguard in late 2016 may have been about another matter entirely. Here’s more from yesterday’s session.

• Joe Biden: The US president has blocked the release of audio recordings of his interviews with Robert Hur, the special counsel who had earlier cast Biden as an “elderly man with a poor memory”.

5. UK-based Arup lost $25mn after fraudsters used a digitally cloned version of a senior manager to order financial transfers during a video conference. The Financial Times has confirmed the engineering group, which employs about 18,000 people globally and has annual revenues of more than £2bn, was the target of what Hong Kong police had previously revealed as one of the world’s biggest known deepfake scams.

The Big Read

Young people’s interest in watching sporting events is waning. A YouGov report last year found that just 31 per cent of global sports fans aged 18-24 watched live matches, compared with 75 per cent for those 55 and over. Instead, younger viewers were more likely to watch highlights clips or interact with star athletes via social media, while a large portion engage with their preferred sports through video games. In an industry built on multibillion-dollar live broadcasting deals, such trends have set off alarm bells on the business model’s long-term viability.

We’re also reading . . . 

• Cyril Ramaphosa: Facing his final election, South Africa’s president is the frontman for a party that has lost its moorings, writes Alec Russell.

• Nuclear’s retiree spree: The sector is luring back thousands of retired engineers and older professionals to staff its biggest wave of new projects in decades.

• Toxic politics: Following the shooting of Prime Minister Robert Fico, could Slovakia’s particularly potent flavour of politics be to blame?

• People’s bid: Joe Biden’s decision to force Chinese company ByteDance to sell TikTok is producing some strange offers to buy the social media site, writes Gillian Tett.

Chart of the day

The risks of “non-communicable” diseases linked to ageing and lifestyle are growing at an alarming pace, while the threat of infectious diseases is diminishing. The findings by the Institute for Health Metrics and Evaluation point to a huge challenge for health services as an ageing global population develops more complex medical conditions.

Take a break from the news

Photographers James Aubrey and Tim Hill trek through the mountains of Kyrgyzstan in the footsteps of Marco Polo, snapping arresting photos along the way.

Additional contributions from Tee Zhuo and Benjamin Wilhelm