This week, the company finally lifted the secret surrounding the date of its much-delayed annual shareholder meeting. According to state laws in Texas, Tesla was obligated to hold the meeting by July 13 — one year and one month after its previous meeting. 

“They can’t even have an annual meeting annually? That’s ridiculous—it’s almost expressing a contempt for lawful and accepted procedure.” Charles Elson told Fortune. “Shareholder voting is a core principle in our system of capital formation, and if you abrogate that, then you punch a hole in the system itself.” 

Elson serves as a subcommittee chair on the American Bar Association’s Business Law Section and is the founding director of the Weinberg Center for Corporate Governance at the University of Delaware. 

In 2024, he resigned from a consulting role with the law firm Holland & Knight—which counted Tesla as a client—after a nearly 30-year relationship in order to avoid interest conflicts when filing a legal opinion on the issue of CEO Elon Musk’s pay package, dubbed “the largest in human history”.

The announcement of the Nov. 6 annual general meeting came just hours after a group of institutional investors representing $1.5 trillion in assets under management expressed their “deep concern” over the delay and called on the board to “immediately” disclose the date.

The board’s ongoing silence

“Tesla’s ongoing silence on the AGM is cause for concern,” they wrote to Tesla’s directors in an open letter published Wednesday. 

The company had first admitted at the end of April that it had failed to file its definitive proxy statement within the normal timeframe, citing no reason. Elson said there were only very few legally defensible justifications for pushing back an annual meeting, such as the lack of audited financial statements. 

Delaying it in order to hold a vote over a new pay package for Musk or a potential investment in his latest startup xAI—the two most commonly cited theories in the Tesla community—did not meet that threshold in his view. 

“The law has to be equally and neutrally applied. There aren’t special exceptions for special people,” Elson said, referring to Musk.

Tesla did not respond to a request from Fortune for comment. 

Unless shareholders mount a legal challenge to the later date, however, there are no repercussions to the company. 

‘Why are these individuals being paid hundreds of millions of dollars?’

Nevertheless, Elson fears this attitude waters down the spirit of capitalism. If a company’s owners don’t feel like they have a say, it lessens the likelihood of investing in equities.

“It’s the one time of the year where every shareholder has the chance to voice their concerns to management in an open forum. It’s a natural part of the corporate calendar that ensures accountability—you can’t deny shareholders their fundamental suffrage right,” he said.

If more companies follow Tesla’s example, disenfranchised investors could increasingly seek the contractual protection of a debt-based financing system. This constrains economic growth, however, since it diminishes the appetite for risk that distinguishes the United States from a sluggish Europe. 

Elson argued a recent proposal by Wedbush analyst Dan Ives to erect a special board oversight committee tasked with exercising influence over their CEO showed just how toothless the current slate of directors led by chair Robyn Denholm really is. “Shut up,” Musk responded to Ives, immediately shooting down the proposal.

“I don’t think this board is capable of acting outside of Musk’s interests. So the question then is what exactly does it do?” Elson asked. “Why are these individuals being paid hundreds of millions of dollars?”