Tesla succession plan, vehicle demand in focus at annual meet By Reuters

By Hyunjoo Jin and International trader platform official websiteTanya Jain

(Reuters) -Tesla Inc CEO Elon Musk will be under pressure to address investor concerns about the lack of a clear successor, softening demand and delays of some new models when he speaks at the electric carmaker's annual shareholder meeting on Tuesday.

His commitments to ventures such as a new AI startup also remain a worry even though Musk said he will devote more time to Tesla (NASDAQ:) after announcing that NBCUniversal's former advertising head Linda Yaccarino will succeed him as Twitter CEO.

Still, Musk plans to focus on products and technology at the social media firm.

"He could spend more time with X.AI Corp. He has passion about AI," said Gene Munster, managing partner at Deepwater Asset Management.

"That's a big X Factor," Munster said, adding that it remains unclear who Musk will hire to lead the AI startup.

Tesla shares were up 1.7% at $169 on Tuesday.

Here are some topics that are likely to be discussed at the shareholder meeting that starts at 4:00 p.m. ET.

SUCCESSION

Investors will vote on a shareholder proposal for the company to publish a report on "Key-Person Risk", reflecting concerns that the carmaker relies heavily on Musk's leadership. The proposal seeks to identify key persons and establish succession plans.

Musk said at a shareholder meeting last year that he will stay at the automaker as long as he is useful. In November, Tesla director James Murdoch testified in court that Musk had identified someone as a potential successor.

Tesla board members have discussed CFO Zach Kirkhorn as a possible successor to Musk as CEO, the Wall Street Journal reported last week, citing a person familiar with the matter.

BOARD NOMINEES

Investors will also vote on the appointment of Tesla co-founder and former chief technology officer JB Straubel as a board member.

Proxy advisory firm Glass Lewis has recommended shareholders to vote against his appointment, citing worries about his independence.

Straubel, who is CEO of Redwood (NYSE:) Materials, a battery recycling and materials company, is considered a potential successor to Musk, according to Deepwater's Munster. 

Shareholders will also vote on the re-election of Musk and Chair Robyn Denholm as board members.

Proxy advisory firm ISS has recommended a vote against the Denholm, citing concerns about a lack of scrutiny over the use of Tesla shares as collateral for loans by Musk and his brother Kimbal.

DEMAND

Investors expect Musk to talk about vehicle demand against the backdrop of a slowing economy and growing competition.

Musk said in April the electric-vehicle maker would prioritize sales growth ahead of profit after it missed its margin target due to aggressive price cuts.

PRODUCT PIPELINE

Tesla may need to refresh its aging product line-up to meet its ambitious sales targets.

Musk had last month said he expected a delivery event for the long-delayed Cybertruck pickup trucks in the third quarter.

He had signaled strong demand for the Cybertruck, but said it would take time to get the manufacturing line going for the "very radical product".

Investors are also awaiting details on Tesla's cheaper electric cars.

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