- A group of 17 Tesla shareholders have asked the company’s board to rein in Elon Musk’s attention.
- In an open letter, investors accused Musk of neglecting Tesla by focusing on his other companies.
- “Corporate boards can and should intervene if a chief executive appears to be distracted,” the letter said.
A group of Tesla investors including pension systems and big institutions are concerned Elon Musk is too distracted to properly run the company, and have called on the Tesla’s board to rein in the CEO.
In open letter sent on Friday, the group of 17 major shareholders, including the New York City Comptroller’s Office, which oversees the city’s $242 billion pension system, and asset management giant Nordea, said they have grown concerned that Musk is not properly focused on Tesla. The investors that signed the letter collectively hold over $1.5 billion of Tesla stock.
“We are concerned that the Board of Directors is failing to adequately represent the interests of Tesla’s shareholders,” the letter reads. “Corporate boards can and should intervene if a chief executive appears to be distracted or overly focused on other ventures. Yet, the Board has permitted Elon Musk to run multiple companies, leading to an inability to address the multiple strategic and competitive issues facing Tesla.”
Investors have previously raised concerns about Musk juggling his many companies, with the mogul overseeing Tesla, Twitter, and SpaceX as all three firms navigate a range of business challenges.
Tesla investors have in particular asked Musk to step away from his chaotic revamp of Twitter, with analysts saying that his antics have damaged the car maker’s brand. Musk previously said he would step down as Twitter’s CEO if he could find someone “foolish” enough to replace him.
“He’s welcome to engage in politics as much as he wants to engage in politics. What we want at Tesla is a CEO that is focused on running Tesla,” NYC Comptroller Brad Lander said in an interview with CNBC on Monday. “What we’re looking for is a CEO whose focus is not on politics, whose focus is not on Twitter, whose focus is not on SpaceX,” he added.
The letter from the investors comes as Tesla faces major challenges in the EV space, with the company battling heightened competition, slowing demand, and broad economic headwinds. The company reported lower profit margins over the last quarter due to recent price cuts on key models.
“Without a fulltime CEO and a Board willing to provide meaningful oversight, we are concerned that Tesla will not be prepared to effectively navigate the increasingly competitive environment for EV sales, the evolving global regulatory landscape, shifting consumer preferences, ongoing supply chain challenges, and investors’ expectations,” the investors wrote.
Shares of Tesla were trading at $159.15 on Tuesday morning, down by about 2%.