As Tesla sales slump amid CEO Elon Musk’s divisive work at the White House, the Trump administration just allowed the electric vehicle company to block nearly all shareholder proposals issued by its investors ahead of its annual meeting. The blocked proposals would have demanded that Tesla not interfere with union efforts and meet global climate goals, among other initiatives.
Tesla’s regulatory win comes amid companies increasingly blocking shareholder resolutions across the board, thanks to new corporate-friendly legal guidance from President Donald Trump’s Securities and Exchange Commission (SEC) allowing businesses to crack down on stakeholder participation.
In early May, the SEC allowed Tesla to omit six out of eight shareholder proposals from its upcoming proxy statement — a corporate document issued to shareholders that allows them to vote on proposals asking the company to operate in certain ways.
The blocked proposals asked Tesla to develop sustainable tires, once again avoid interfering with potential union organizing efforts, align business operations with the 2015 Paris Climate Agreement, issue a moratorium on deep-sea mineral mining, disclose its Veteran hiring efforts, and use artificial intelligence “in ways that accelerates the world’s transition to sustainable energy.”
Tesla has not yet announced a date for its 2025 annual shareholder meeting.
Musk, Trump’s largest campaign donor, has scored a number of regulatory wins for his business empire since Trump took office. Trump appointed Musk to a crucial oversight role leading the new Department of Government Efficiency, which he’s used to slash nearly 2,300 government contracts while obtaining lucrative contracts for his own companies. At the same time, more than 40 federal agencies have curtailed regulatory actions against Musk’s companies, including Tesla, satellite company Starlink, rocket manufacturer SpaceX, and social media company X.
Tesla’s stock performance and sales have taken a hit since Musk began working to gut the federal government. A prominent Tesla investor said Musk should resign from his role as CEO of the company in March, and the following month, Musk said he would be pulling back from his White House duties to focus on Tesla. In April, domestic Tesla sales were down 9 percent, and the company’s sales across Europe were down nearly 50 percent.
Tesla did not respond to a request for comment.
Katya Schwenk
Union Rights Can “Micromanage” Tesla
Shareholder proposals are a cornerstone of the investment world. These proposals allow investors, both large and small, to have a say in how publicly owned companies operate, and any shareholder who owns a minimum number of shares can issue proposals to be voted on during annual shareholder meetings.
However, companies can ask the SEC, which regulates the stock market and other investments, to allow them to block proposals that are too vague, overly broad, or would interrupt standard business operations — a tool corporations have increasingly deployed to silence investors.
According to a recent study by the Harvard Law School Forum on Corporate Governance, the number of blocked shareholder proposals granted by the SEC has “increased dramatically” in the first quarter of 2025.
The study authors link the increase to Feb. 12 legal guidance called Staff Legal Bulletin 14M, which expanded the reasons for why a company can block shareholder proposals. According to the Harvard Law analysis, the new guidance “places the onus on proponents to demonstrate that the issue at hand is significant and economically relevant to the company.”
At the same time, the total number of proposals submitted by shareholders has dropped at companies across the board — in part, note the study’s authors, because of “increased political pushback.
In seeking permission to block the recent shareholder proposals, Tesla’s general counsel repeatedly cited an SEC rule that allows companies to block proposals that may interfere with the day-to-day business operations and another rule that allows companies to block proposals that seek to “micromanage” the company. Tesla also cited the new SEC legal guidance published in February.
Several shareholders, including a group of nuns from rural Kansas and other activist investor groups, submitted a proposal asking Tesla to adopt a “Non-interference Policy upholding the rights to freedom of association and collective bargaining in its operations.” Tesla’s general counsel asked the SEC for permission to block this proposal, claiming that the proposal “impermissibly seeks to micromanage the Company by seeking to impose a specific method for implementing a complex policy.”
Trump’s SEC agreed, stating: “In our view, the Proposal seeks to micromanage the Company. Accordingly, we will not recommend enforcement action to the Commission if the Company omits the Proposal from its proxy materials.”
The shareholder proposal omission comes after former President Joe Biden’s National Labor Relations Board issued a 2024 complaint against Tesla, claiming that the company’s policies against personal cellphone use violated labor laws. The company has also faced various racial discrimination lawsuits. The United Auto Workers Union, which has been trying to unionize Tesla workers since 2016, filed a complaint against Musk and Trump in 2024, claiming that the duo attempted to threaten and intimidate unionizing workers.
Trump’s SEC also allowed Tesla to block a shareholder proposal asking the company to align its business operations with the 2015 Paris Climate Agreement, which seeks to limit global temperature increases to 1.5 degrees Celsius and achieve net-zero greenhouse gas emissions by 2100.
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Tesla has been a leader in renewable energy technology, with its electric battery products servicing solar and wind operations. But the company asked the SEC to allow it to deny the greenhouse-gas proposal because it claimed the matter would interfere with the company’s day-to-day operations and specifically hamstring its efforts to implement resource-intensive AI.
“The Proposal goes far beyond a request to adopt and disclose an overall strategy to align the Company’s operations and business model with the goals of the Paris Climate Accord,” Tesla stated in a letter to the SEC. “Upon a closer read, the Proposal evinces a specific focus on the regulation of the Company’s AI operations and reducing emissions related to AI.”
Artificial intelligence consumes massive amounts of electricity, and the U.S.-based data centers used to power AI consumed more electricity than all California households in 2023.
The SEC allowed Tesla to dismiss the climate change proposal, stating that it “seeks to micromanage the company.”
The SEC denied Tesla’s request to omit two other shareholder proposals from its annual meeting. One proposal demands that Tesla disclose the number of harassment and discrimination complaints it has received and the total amount of money it has paid to settle any disputes.
The other proposal demands that Tesla issue a report on “quantitative data appropriate to assessing the feasibility of integrating sustainability metrics, including those regarding diversity and independence among senior executives, into performance measures or vesting conditions that may apply to senior executives under compensation plans or arrangements.”
Those measures will now be voted on by Tesla shareholders during its annual meeting.
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