Jack Dorsey, a founder of Twitter, got a subpoena. So did Marc Andreessen, a prominent venture capitalist. Larry Ellison, Oracle’s chairman, and the investors David Sacks and Joe Lonsdale received them, too.
They were all summoned to share what they know about the rancorous, knock-down, drag-out tech spectacle of the year: the fight between Twitter and Elon Musk, the world’s richest man.
Mr. Musk enthusiastically agreed to buy Twitter in April for $44 billion, but has since tried to back out of the blockbuster deal, leading to lawsuits and recriminations. Both sides are set for a showdown in Delaware Chancery Court in October over whether Mr. Musk needs to stick with the acquisition. The torrent of legal demands in the case has forced a who’s who of Silicon Valley to now lawyer up, creating a heyday for top-tier law firms.
unsolicited bid worth more than $40 billion for the social network, saying he wanted to make Twitter a private company and allow people to speak more freely on the service.
Of the two sides, Twitter has so far been more aggressive in the discovery process for the case. The company has issued more than 84 subpoenas to uncover discussions that might prove that Mr. Musk soured on the acquisition because the economic downturn decreased his personal wealth. (Mr. Musk’s net worth still stands at $259 billion, according to Bloomberg.)
Twitter has sent subpoenas to Mr. Musk’s friends and associates, such as the former SpaceX board member Antonio Gracias and the entertainment executive Kristina Salen, to get insight into their group chats. The company has also summoned investors like Mr. Andreessen and Mr. Ellison, who agreed to pony up money so Mr. Musk could do the deal.
Mr. Musk himself has agreed to sift through every text he sent or received between Jan. 1 and July 8 for messages relevant to Twitter. His side’s subpoena total stands at more than 36 — including one to Mr. Dorsey — as Mr. Musk tries to show that Twitter lied about the number of inauthentic accounts on its platform, which he has cited as a reason to pull out of the deal.
Mr. Musk has demanded voluminous data from Twitter, including correspondence among its board members and years of account information. Last Thursday, the court granted Mr. Musk a limited set of 9,000 accounts that Twitter audited to determine how many bots were on the platform during a particular quarter. He has also subpoenaed the company’s bankers, Goldman Sachs and J.P. Morgan.
But Mr. Musk has also shown his unhappiness over Twitter’s attempts to obtain his group chats. This month, his lawyers tried limiting the company’s inquiries, saying they did not plan to turn over messages from “friends and acquaintances with whom Mr. Musk may have had passing exchanges regarding Twitter.”
tweeted.
Mr. Sacks, another friend of Mr. Musk’s who worked with him at PayPal, responded to a subpoena from Twitter with a tweet that included an image of a Mad magazine cover featuring a giant middle finger.
In a court filing on Friday, Mr. Sacks’s lawyers, who filed a motion to quash the subpoenas, said he had produced 90 documents for Twitter so far. They accused the company of “harassing” Mr. Sacks and creating “significant” legal bills for him by subpoenaing him in California and Delaware.
A lawyer for Mr. Sacks did not respond to a request for comment.
Kathaleen McCormick, the judge overseeing the case, has largely waved off Mr. Musk’s objections about the subpoenas to his friends. Mr. Musk’s conduct in discovery “has been suboptimal,” and his requests for years of data were “absurdly broad” she wrote in rulings last week.
“Defendants cannot refuse to respond to a discovery request because they have unilaterally deemed the request irrelevant,” Ms. McCormick wrote. “Even assuming that Musk has many friends and family members, Defendants’ breadth, burden, and proportionality arguments ring hollow.”
Ed Zimmerman, a lawyer who represents start-ups and venture capitalists, said it wasn’t surprising that Silicon Valley techies appeared unwilling to be drawn into the case. The venture industry has long operated with little regulatory oversight. Investors have only begrudgingly become more accustomed to legal processes as their industry has fallen under more scrutiny, he said.
“Venture for so long has been very accustomed to being an outsider thing,” he said. “We didn’t have to focus on following all the rules, and there wasn’t that much litigation.”
For law firms, Mr. Musk’s battle with Twitter has become a bonanza — especially financially.
“I’m sure they’re all hiring fancy high-end law firms,” Mr. Melkonian said. “Those guys are going to charge thousands of dollars per hour for preparation.”
That’s if you can find a lawyer at all. Between Mr. Musk and Twitter, they have sewn up a passel of top law firms.
Twitter has hired five law firms with expertise in corporate disputes and Delaware law: Wachtell, Lipton, Rosen & Katz; Potter Anderson & Corroon; Ballard Spahr; Kobre & Kim; and Wilson Sonsini Goodrich & Rosati. Mr. Musk has retained a team of four firms: Skadden, Arps, Slate, Meagher & Flom; Quinn Emanuel Urquhart & Sullivan; Chipman Brown Cicero & Cole; and Sheppard Mullin.
Other leading tech law firms — including Freshfields Bruckhaus Deringer, Perkins Coie, Baker McKenzie, and Fenwick & West — declined to comment, citing conflicts in the case.
Lawyers sitting on the sidelines probably feel left out, Mr. Zimmerman said. “If I were a trial lawyer in San Francisco, with a specialty of dealing with venture funds and the growth companies they invest in, there ought to be that FOMO,” he said, referring to the shorthand for the “fear of missing out.”
For those who have been tapped, the next several months are likely to be chaotic.
“For people who do this work, this is what we live for,” said Karen Dunn, a litigator for tech companies who has represented Apple and Uber, and who is not involved in the Twitter case. “It moves incredibly fast, it is all consuming.”
The lawsuit filed by the Tesla and SpaceX CEO alleges Twitter committed fraud and breach of contract, according to The Washington Post.
Elon Musk accused Twitter of fraud in a countersuit over his aborted $44 billion deal for the social media company, which he said held back necessary information and misled his team about its true user base, according to media reports.
According to The Washington Post, the countersuit filed by the billionaire and Tesla CEO filed Thursday alleges that Twitter committed fraud, breach of contract and violation of the Texas Securities Act.
Musk’s counterclaims were filed confidentially last week and unsealed in a filing late Thursday at the Delaware Chancery Court, the Wall Street Journal reported.
Related StoryTwitter-Musk Takeover Dispute Heading For An October Trial
Musk had offered to buy the company earlier this year, then tried to back out of the deal by claiming the social platform was infested with much larger numbers of “spam bots” and fake accounts than Twitter had disclosed.
Twitter sued to force him to complete the acquisition. Musk responded by filing his countersuit.
Musk’s attorneys argued that Twitter’s own disclosures revealed that it has 65 million fewer “monetizable daily active users,” who can be shown digital ads, than the 238 million that Twitter claims, the Post and the Journal reported.
The filing also said most of Twitter’s ads are shown only to a sliver of the company’s user base, the Post said.
In an unexpected twist, Twitter filed its response denying Musk’s accusations before Musk’s own counterclaims surfaced.
Twitter called Musk’s reasoning “a story, imagined in an effort to escape a merger agreement that Musk no longer found attractive.”
The case is scheduled to go to trial on October 17.
Now that Elon Musk has signaled his intent to walk away from his $44 billion offer to buy Twitter, the fate of the influential social media network will be determined by what may be an epic court battle, involving months of expensive litigation and high-stakes negotiations by elite lawyers on both sides.
The question is whether Mr. Musk will be legally compelled to stick with his agreed-upon acquisition or be allowed to back out, possibly by paying a 10-figure penalty.
Most legal experts say Twitter has the upper hand, in part because Mr. Musk attached few strings to his agreement to buy the company, and the company is determined to force the deal through.
inauthentic accounts. He also said that Mr. Musk did not believe the metrics that Twitter has publicly disclosed about how many of its users were fake.
Twitter’s board responded by saying it intended to consummate the acquisition and would sue Mr. Musk in a Delaware chancery court to force him to do so.
At the heart of the dispute are the terms of the merger agreement that Mr. Musk reached with Twitter in April. His contract with Twitter allows him to break off his deal by paying a $1 billion fee, but only under specific circumstances such as losing debt financing. The agreement also requires Twitter to provide data that Mr. Musk may require to complete the transaction.
Mr. Musk has demanded that Twitter give a detailed accounting of the spam on its platform. Throughout June, lawyers for Mr. Musk and Twitter have wrangled over how much data to share to satisfy Mr. Musk’s inquiries.
as they face advertising pressure, global economic upheaval and rising inflation. Twitter’s stock has fallen about 30 percent since the deal was announced, and trades well under the Mr. Musk’s offering price of $54.20 a share.
Legal experts said Mr. Musk’s dispute over spam could be a ploy to force Twitter back to the bargaining table in hopes of securing a lower price.
During the deal-making, no other potential buyer emerged as a white knight alternative to Mr. Musk, making his offer the best that Twitter is likely to get.
Twitter’s trump card is a “specific performance clause” that gives the company the right to sue Mr. Musk and force him to complete or pay for the deal, so long as the debt financing he has corralled remains intact. Forced acquisitions have happened before: In 2001, Tyson Foods tried to back out of an acquisition of the meatpacker IBP, pointing to IBP’s financial troubles and accounting irregularities. A Delaware court vice chancellor ruled that Tyson had to complete the acquisition,
jittery employees.
attempted to break up its $16 billion deal to acquire Tiffany & Company, ultimately securing a discount of about $420 million.
“This stuff is a bargaining move in an economic transaction,” said Charles Elson, a recently retired professor of corporate governance at the University of Delaware. “It’s all about money.”
A lower price would benefit Mr. Musk and his financial backers, especially as Twitter faces financial headwinds. But Twitter has made clear it wants to force Mr. Musk to stick to his $44 billion offer.
The most damaging outcome for Twitter would be for the deal to collapse. Mr. Musk would need to show that Twitter materially and intentionally breached the terms of its contract, a high bar that acquirers have rarely met. Mr. Musk has claimed that Twitter is withholding information necessary for him to close the deal. He has also argued that Twitter misreported its spam figures, and the misleading statistics concealed a serious problem with Twitter’s business.
A buyer has only once successfully argued in a Delaware court that a material change in the target company’s business gives it the ability to cleanly exit the deal. That occurred in 2017 in the $3.7 billion acquisition of the pharmaceutical company Akorn by the health care company Fresenius Kabi. After Fresenius signed the agreement, Akorn’s earnings fell and it faced allegations by a whistle-blower of skirting regulatory requirements.
Even if Twitter shows that it did not violate the merger agreement, a chancellor in the Delaware court may still allow Mr. Musk to pay damages and walk away, as in the case of Apollo Global Management’s deal combining the chemical companies Huntsman and Hexion in 2008. (The lawsuits concluded in a broken deal and a $1 billion settlement.)
habit of flouting legal confines.
revealed in May that it was examining Mr. Musk’s purchases of Twitter stock and whether he properly disclosed his stake and his intentions for the social media company. In 2018, the regulator secured a $40 million settlement from Mr. Musk and Tesla over charges that his tweet falsely claiming he had secured funding to take Tesla private amounted to securities fraud.
“At the end of the day, a merger agreement is just a piece of paper. And a piece of paper can give you a lawsuit if your buyer gets cold feet,” said Ronald Barusch, a retired mergers and acquisitions lawyer who worked for Skadden Arps before it represented Mr. Musk. “A lawsuit doesn’t give you a deal. It generally gives you a protracted headache. And a damaged company.”
Kimbal Musk and Mr. Gracias, who left Tesla’s board last year and serves as a SpaceX director, declined to comment for this article.
Today, Mr. Musk oversees or is associated with at least a dozen companies, including public ones, private ones and holding companies such as Wyoming Steel, which he uses to manage real estate. His net worth stands at about $250 billion.
A Close Circle
As Mr. Musk established more companies, he collected associates he could deploy across many of the endeavors.
One was Mary Beth Brown, who was hired in 2002 to essentially be Mr. Musk’s executive assistant. Known as M.B., she soon became a kind of chief of staff, handling media requests and some financial matters for SpaceX and Tesla, as well as helping to manage Mr. Musk’s personal life, said Ashlee Vance, the author of “Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future.”
That same year, Mr. Musk hired Gwynne Shotwell as SpaceX’s seventh employee. As the rocket maker’s president and chief operating officer, Ms. Shotwell has overseen the company’s growth, becoming one of Mr. Musk’s longest-lasting employees.
At a conference in 2018, Ms. Shotwell explained how she managed Mr. Musk.
Gwynne Shotwell, SpaceX’s president and chief operating officer.Credit…Patrick T. Fallon/Bloomberg
“When Elon says something, you have to pause and not immediately blurt out, ‘Well, that’s impossible,’ or, ‘There’s no way we’re going to do that. I don’t know how,’” she said. “So you zip it, and you think about it. And you find ways to get that done.”
Twitter, which went public in 2013, has also had a tumultuous corporate history. It has repeatedly dealt with board dysfunction and drama with its founders, and was courted by other interested buyers in the past, including Disney and Salesforce. In 2020, the activist investment firm Elliott Management took a stake in Twitter and called for Jack Dorsey, one of its founders, to resign as chief executive. Mr. Dorsey stepped down last year.
“This company is very much undermonetized, especially compared to other platforms and competitors like Facebook,” said Pinar Yildirim, a professor of marketing at the University of Pennsylvania Wharton School of Business. “If you look at it from a point of pure business value, there’s definitely room for improvement.”
In a statement, Bret Taylor, Twitter’s chairman, said that the board had “conducted a thoughtful and comprehensive process” on Mr. Musk’s bid and that the deal would “deliver a substantial cash premium” for shareholders.
Regulators are unlikely to seriously challenge the transaction, former antitrust officials said, since the government most commonly intervenes to stop a deal when a company is buying a competitor.
The deal came together in a matter of weeks. Mr. Musk, who also leads the electric carmaker Tesla and the rocket maker SpaceX, began buying shares of Twitter in January and disclosed this month that he had amassed a stake of more than 9 percent.
That immediately set off a guessing game over what Mr. Musk planned to do with the platform. Twitter’s executives initially welcomed him to the board of directors, but he reversed course within days and instead began a bid to buy the company outright.
Any agreement initially appeared unlikely because the entrepreneur did not say how he would finance the deal. Twitter’s executives appeared skeptical, too, given that it was difficult to discern how much Mr. Musk might be jesting. In 2018, for example, he tweeted that he planned to take Tesla private and inaccurately claimed that he had “funding secured” for such a deal.
Mr. Musk has objected when politicians have tried to characterize his views as in sync with their own, insisting that he would rather leave politics to others, despite ample evidence on Twitter to the contrary. When Mr. Abbott last year defended a strict anti-abortion law that made the procedure virtually illegal in Texas by citing Mr. Musk’s support — “Elon consistently tells me that he likes the social policies in the state of Texas,” the governor said — Mr. Musk pushed back.
“In general, I believe government should rarely impose its will upon the people, and, when doing so, should aspire to maximize their cumulative happiness,” he responded on Twitter. “That said, I would prefer to stay out of politics.”
If that’s the case, he often can’t seem to help himself. He heckles political figures who have taken a position he disagrees with or who have seemingly slighted him. Mr. Musk’s response to Senator Elizabeth Warren after she said that he should pay more in income taxes was, “Please don’t call the manager on me, Senator Karen.”
After one of Mr. Musk’s Twitter fans pointed out that President Biden had not congratulated SpaceX for the successful completion of a private spaceflight last fall, Mr. Musk hit back with a jab reminiscent of Mr. Trump’s derisive nickname “Sleepy Joe.”
“He’s still sleeping,” he replied. Several days later, he criticized the Biden administration as “not the friendliest” and accused it of being controlled by labor unions. These comments came just a few weeks after his insistence that he preferred to stay out of politics.
Few issues have raised his ire as much as the coronavirus restrictions, which impeded Tesla’s manufacturing operations in California and nudged him closer to his decision last year to move the company’s headquarters to Texas. That move, however, was very much symbolic since Tesla still has its main manufacturing plant in the San Francisco Bay Area suburb of Fremont, Calif., and a large office in Palo Alto.
Over the course of the pandemic, Mr. Musk’s outbursts flared dramatically as he lashed out at state and local governments over stay-at-home orders. He initially defied local regulations that shut down his Tesla factory in Fremont. He described the lockdowns as “forcibly imprisoning people in their homes” and posted a libertarian-tinged rallying cry to Twitter: “FREE AMERICA NOW.” He threatened to sue Alameda County for the shutdowns before relenting.
Poison pills have been around for decades. The lawyer Martin Lipton, a founding partner of Wachtell, Lipton, Rosen & Katz, invented the maneuver, also called a shareholder rights plan, in 1982. It was a way to shore up a company’s defenses against unwanted takeovers by so-called corporate raiders like Carl Icahn and T. Boone Pickens.
They have since become a part of the corporate tool kit in America. Netflix adopted a poison pill in 2012 to stop Mr. Icahn from buying up its shares. Papa John’s used one against the pizza chain’s founder and chairman, John Schnatter, in 2018.
Investors rarely try to get around a poison pill by buying shares beyond the threshold set by the company, according to securities experts. One said it would be “financially ruinous,” even for Mr. Musk.
But Mr. Musk, who is worth more than $250 billion and is the chief executive of Tesla and SpaceX, rarely abides by precedent. He announced his intention to acquire Twitter on Thursday, making public an unsolicited bid worth more than $40 billion. In an interview at a TED conference later that day, he took issue with Twitter’s moderation policies, which govern the content shared on the platform.
Twitter is the “de facto town square,” Mr. Musk said, adding that “it’s really important that people have the reality and the perception that they are able to speak freely within the bounds of the law.” Twitter currently bans many types of content, including spam, threats of violence, the sharing of private information and coordinated disinformation campaigns.
Mr. Musk argued that taking Twitter private would allow more free speech to flow on the platform. “My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he said during the TED interview. He also insisted that the algorithm Twitter uses to rank its content, deciding what hundreds of millions of users see on the service every day, should be public for users to audit.
Mr. Musk’s concerns are shared by many executives at Twitter, who have also pressed for more transparency about its algorithms. The company has published internal research about bias in its algorithms and funded an effort to create an open, transparent standard for social media services.
After war began last month, President Volodymyr Zelensky of Ukraine turned to Mykhailo Fedorov, a vice prime minister, for a key role.
Mr. Fedorov, 31, the youngest member of Mr. Zelensky’s cabinet, immediately took charge of a parallel prong of Ukraine’s defense against Russia. He began a campaign to rally support from multinational businesses to sunder Russia from the world economy and to cut off the country from the global internet, taking aim at everything from access to new iPhones and PlayStations to Western Union money transfers and PayPal.
To achieve Russia’s isolation, Mr. Fedorov, a former tech entrepreneur, used a mix of social media, cryptocurrencies and other digital tools. On Twitter and other social media, he pressured Apple, Google, Netflix, Intel, PayPal and others to stop doing business in Russia. He helped form a group of volunteer hackers to wreak havoc on Russian websites and online services. His ministry also set up a cryptocurrency fund that has raised more than $60 million for the Ukrainian military.
The work has made Mr. Fedorov one of Mr. Zelensky’s most visible lieutenants, deploying technology and finance as modern weapons of war. In effect, Mr. Fedorov is creating a new playbook for military conflicts that shows how an outgunned country can use the internet, crypto, digital activism and frequent posts on Twitter to help undercut a foreign aggressor.
McDonald’s have withdrawn from Russia, with the war’s human toll provoking horror and outrage. Economic sanctions by the United States, European Union and others have played a central role in isolating Russia.
Mr. Zelensky was elected in 2019, he appointed Mr. Fedorov, then 28, to be minister of digital transformation, putting him in charge of digitizing Ukrainian social services. Through a government app, people could pay speeding tickets or manage their taxes. Last year, Mr. Fedorov visited Silicon Valley to meet with leaders including Tim Cook, the chief executive of Apple.
Russia invaded Ukraine, Mr. Fedorov immediately pressured tech companies to pull out of Russia. He made the decision with Mr. Zelensky’s backing, he said, and the two men speak every day.
“I think this choice is as black and white as it ever gets,” Mr. Fedorov said. “It is time to take a side, either to take the side of peace or to take the side of terror and murder.”
On Feb. 25, he sent letters to Apple, Google and Netflix, asking them to restrict access to their services in Russia. Less than a week later, Apple stopped selling new iPhones and other products in Russia.
Russia damaged the country’s main telecommunications infrastructure. Two days after contacting Mr. Musk, a shipment of Starlink equipment arrived in Ukraine.
Since then, Mr. Fedorov said he has periodically exchanged text messages with Mr. Musk.
were put on pause following the invasion. Russia, a signatory to the accord, has tried to use final approval of the deal as leverage to soften sanctions imposed because of the war.
But while many companies have halted business in Russia, more could be done, he said. Apple and Google should pull their app stores from Russia and software made by companies like SAP was also being used by scores of Russian businesses, he has noted.
In many instances, the Russian government is cutting itself off from the world, including blocking access to Twitter and Facebook. On Friday, Russian regulators said they would also restrict access to Instagram and called Meta an “extremist” organization.
Some civil society groups have questioned whether Mr. Fedorov’s tactics could have unintended consequences. “Shutdowns can be used in tyranny, not in democracy,” the Internet Protection Society, an internet freedom group in Russia, said in a statement earlier this week. “Any sanctions that disrupt access of Russian people to information only strengthen Putin’s regime.”
Mr. Fedorov said it was the only way to jolt the Russian people into action. He praised the work of Ukraine-supporting hackers who have been coordinating loosely with Ukrainian government to hit Russian targets.
“After cruise missiles started flying over my house and over houses of many other Ukrainians, and also things started exploding, we decided to go into counter attack,” he said.
Mr. Fedorov’s work is an example of Ukraine’s whatever-it-takes attitude against a larger Russian army, said Max Chernikov, a software engineer who is supporting the volunteer group known as the IT Army of Ukraine.
“He acts like every Ukrainian — doing beyond his best,” he said.
Mr. Fedorov, who has a wife and young daughter, said he remained hopeful about the war’s outcome.
“The truth is on our side,” he added. “I’m sure we’re going to win.”
Daisuke Wakabayashi and Mike Isaac contributed reporting.
Tesla will move its headquarters from California to Austin, Texas, where it is building a new factory, its chief executive, Elon Musk, said at the company’s annual shareholder meeting on Thursday.
The move makes good on a threat that Mr. Musk issued more than a year ago when he was frustrated by local coronavirus lockdown orders that forced Tesla to pause production at its factory in Fremont, Calif. Mr. Musk on Thursday said the company would keep that factory and expand production there.
“There’s a limit to how big you can scale in the Bay Area,” he said, adding that high housing prices there translate to long commutes for some employees. The Texas factory, which is near Austin and will manufacture Tesla’s Cybertruck, is minutes from downtown and from an airport, he said.
Mr. Musk was an outspoken early critic of pandemic restrictions, calling them “fascist” and predicting in March 2020 that there would be almost no new cases of virus infections by the end of April. In December, he said he had moved himself to Texas to be near the new factory. His other company, SpaceX, launches rockets from the state.
Hewlett Packard Enterprise said in December that it was moving to the Houston area, and Charles Schwab has moved to a suburb of Dallas and Fort Worth.
Mr. Musk’s decision will surely add fuel to a ceaseless debate between officials and executives in Texas and California about which state is a better place to do business. Gov. Greg Abbott of Texas, and his predecessors, have courted California companies to move to the state, arguing that it has lower taxes and lower housing and other costs. California has long played up the technological prowess of Silicon Valley and its universities as the reason many entrepreneurs start and build their companies there, a list that includes Tesla, Facebook, Google and Apple.
Texas has become more attractive to workers in recent years, too, with a generally lower cost of living. Austin, a thriving liberal city that is home to the University of Texas, in particular has boomed. Many technology companies, some based in California, have built huge campuses there. As a result, though, housing costs and traffic have increased significantly, leaving the city with the kinds of problems local governments in California have been dealing with for years.
Mr. Musk’s announcement is likely to take on political overtones, too.
Last month, Mr. Abbott invoked Mr. Musk in explaining why a new Texas law that greatly restricts abortion would not hurt the state economically. “Elon consistently tells me that he likes the social policies in the state of Texas,” the governor told CNBC.
he said on Twitter. “That said, I would prefer to stay out of politics.”
On Thursday evening, a Twitter post by Governor Abbott welcomed the news, saying “the Lone Star State is the land of opportunity and innovation.”
A spokeswoman for Gov. Gavin Newsom of California, Erin Mellon, did not directly comment on Tesla’s move but said in a statement that the state was “home to the biggest ideas and companies on the planet” and that California would “stand up for workers, public health and a woman’s right to choose.”
Mr. Musk revealed the company’s move after shareholders voted on a series of proposals aimed at improving Tesla’s corporate governance. According to preliminary results, investors sided with Tesla on all but two measures that it opposed: one that would force its board members to run for re-election annually, down from every three years, and another that would require the company to publish more detail about efforts to diversify its work force.
In a report last year, Tesla revealed that its U.S. leadership was 59 percent white and 83 percent male. The company’s overall U.S. work force is 79 percent male and 34 percent white.
The vote comes days after a federal jury ordered Tesla to pay $137 million to Owen Diaz, a former contractor who said he faced repeated racist harassment while working at the Fremont factory, in 2015 and 2016. Tesla faces similar accusations from dozens of others in a class-action lawsuit.
The diversity report proposal, from Calvert Research and Management, a firm that focuses on responsible investment and is owned by Morgan Stanley, requires Tesla to publish annual reports about its diversity and inclusion efforts, something many other large companies already do.
Investors also re-elected to the board Kimbal Musk, Mr. Musk’s brother, and James Murdoch, the former 21st Century Fox executive, despite a recommendation to vote against them by ISS, a firm that advises investors on shareholder votes and corporate governance.
Proposals calling for additional reporting both on Tesla’s practice of using mandatory arbitration to resolve employee disputes and on the human rights impact of how it sources materials failed, according to early results. A final tally will be announced in the coming days, the company said.
On Friday, some Silicon Valley technology companies began speaking out, too.
Lyft’s chief executive, Logan Green, said the company would pay the legal costs of any drivers who faced lawsuits under the law. “TX SB8 threatens to punish drivers for getting people where they need to go — especially women exercising their right to choose,” he wrote on Twitter.
Uber’s chief executive, Dara Khosrowshahi, said on Twitter that his company would also cover its drivers’ legal expenses.
And Jeremy Stoppelman, the chief executive of Yelp, issued a statement. “The effective ban on abortions in Texas not only infringes on women’s rights to reproductive health care, but it puts their health and safety at greater risk,” he said. “We are deeply concerned about how this law will impact our employees in the state.”
A couple executives tried to find a middle ground, cheering on democracy and opposing discrimination while remaining silent on the Texas law.
Mr. Musk, who said he has moved to Texas and was investing a lot in the state through Tesla and SpaceX, was among them. “In general, I believe government should rarely impose its will upon the people, and, when doing so, should aspire to maximize their cumulative happiness,” he wrote on Twitter in response to Mr. Abbott’s comments. “That said, I would prefer to stay out of politics.”
Hewlett Packard Enterprise, based in Houston, declined to comment on the ban, but said the company “encourages our team members to engage in the political process where they live and work and make their voices heard through advocacy and at the voting booth.”
A spokesman for the company added that its medical plan allowed employees to seek abortions out of state, and would pay for lodging for such a trip.
Twitter-Musk Takeover Dispute Heading For An October Trial
