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- Tesla investors demanded that Elon Musk be reined in via an open letter citing his many commitments.
- The 17 investors are looking for a CEO who "dedicates sufficient time and attention to their company."
- Courtney Wicks, an investor at Insider, told Insider that Musk can't "focus on Tesla" because of his other business opportunities.
Tesla investors are calling on Elon Musk to rein him in. They claim that the CEO is distracted by his commitments with other companies, such as Twitter.
Insider has published an open letter addressed to Robyn Denholm, the chairwoman of Tesla's board and Ira Ehrenpreis. In it, 17 shareholders representing approximately $1.5 billion worth of shares ask that they meet to find solutions by May 25, 2018.
The letter said that the Board had allowed the CEO to overcommit at a critical time for the company. The letter continued, "Corporate board can and should act if the CEO appears distracted or too focused on other endeavors."
They want a chief executive who "dedicates sufficient time and attention to his company" and that "overhauls the composition of the Board including removing directors with close ties to him."
The letter stated that "without a full-time CEO and a Board who are willing to provide meaningful supervision, we're concerned that Tesla won't be prepared to navigate effectively the increasingly competitive environment of EV sales, as well as the changing global regulatory landscape, consumer preferences, supply chain challenges and investor expectations."
Investors claim that the board "failed" to "ensure" Musk is "appropriately focused" on Tesla due to his other businesses, including SpaceX and Neuralink. Tesla's board composition has been criticized in the past. A Tesla shareholder filed a lawsuit against the company in 2018 over Musk's $55-billion compensation plan. The shareholder claimed that Musk had influence over Tesla's board of directors, which included his brother and close friends. The case has not yet been decided by a judge.
Investor Advocates for Social Justice and Sisters of the Good Shepherd were among the investors that signed the letter on Friday. They want the board of directors to have more control over Musk. Amalgamated Bank, Investor Advocates for Social Justice and Sisters of the Good Shepherd are among the investors who signed the open letter Friday. They want the board to have more control over Musk.
The letter mentioned the multiple issues that investors believe Tesla faces, including its treatment of employees. It also referred to the lawsuit with the California Civil Rights regulator regarding allegations that Tesla's Fremont Factory was a "racially-segregated workplace" where Black workers were subjected racial insults and discriminated against.
Courtney Wicks of Investor Advocates for Social Justice told Insider that it was "unprecedented for a CEO of a company to engage in the type of business Elon Musk does, and this is certainly harming Tesla".
Wicks stated that Musk's "outside opportunities" don't permit him to "focus exclusively on Tesla." She said the company had not responded to previous open letters.
Tesla and Musk did not immediately respond to Insider's requests for comments before publication.
Ross Gerber is the CEO and president of Gerber Kawasaki Wealth and Investment Management and an investor in Tesla. He tweeted on Thursday, that the company, "needs Steve Jobs badly." Then he added, "Or just a full-time CEO!" The open letter does not include Gerber's full name.
–Ross Gerber (@GerberKawasaki) April 20, 2023
It's not the first time Tesla's shareholders have expressed their concern about Musk's commitment towards the company. Leo Koguan – one of Tesla's largest shareholders – tweeted on December 14, 2014, that Musk abandoned the electric vehicle maker after Musk purchased Twitter in October.
Koguan, at the time, said that Tesla "deserves and needs a full-time CEO".
Tesla's shares fell on Thursday after the company announced that its aggressive price reductions had eroded profit margins for its first-quarter earnings. Tesla aggressively lowered the price of the Model 3 and Model Y in the last quarter to increase its market share.
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By: gkay@insider.com (Grace Kay,Sam Tabahriti)
Title: Tesla investors call for ‘distracted’ Elon Musk to be reined in as they worry he’s ‘overcommitted’
Sourced From: www.businessinsider.com/tesla-investors-open-letter-board-elon-musk-distracted-2023-4
Published Date: Fri, 21 Apr 2023 20:05:28 +0000
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