ARTICLE AD BOX
Elon Musk interviews on CNBC from the Tesla Headquarters in Texas.
CNBC
Elon Musk needs to spend more time at Tesla as his electric vehicle company faces a "crisis," according to a letter on Wednesday from a group of pension fund leaders who manage investments in the company.
"Tesla's stock price volatility, declining sales, as well as disconcerting reports regarding the company's human rights practices, and a plummeting global reputation are cause for serious concern," the investors wrote in a letter to Robyn Denholm, the company's board chair. "Moreover, many issues are linked to Mr. Musk's actions outside of his role as Technoking and Chief Executive Officer at Tesla, including his high-profile role as an architect of the U.S. Department of Government Efficiency (DOGE)."
The investors want the Tesla board to require Musk to work a minimum of 40 hours per week at the automaker as a condition of any new compensation plan they may arrange for him. They also want a clear succession plan for management of the EV business, and a policy that would apply to all Tesla directors limiting their outside board commitments at public and private companies.
Early last year, the Delaware Court of Chancery ordered Tesla to rescind Musk's 2018 CEO pay package, which had been worth around $56 billion, finding that Musk controlled the company, and the board's compensation committee misled shareholders before seeking their vote to approve the plan.
Musk now says he wants even more shares, amounting to 25% voting control of the company.
Tesla's brand value and reputation have declined since 2024, due largely to Musk's incendiary rhetoric and political activities. In addition to pouring nearly $300 million into an effort to get Donald Trump back into the White House, Musk formally endorsed Germany's far-right AfD party ahead of the country's parliamentary election this year.
At DOGE, Musk has led an initiative by the Trump administration to slash federal agencies.
Tesla once ranked eighth among the most popular American brands in the Axios Harris Poll of public perceptions of the 100 most visible U.S. companies. But recently, Tesla dropped to 95th, behind six other automakers in that poll.
Tesla's stock price is down 12% this year, while the Nasdaq is down just 1%.
Data this week revealed that Tesla's monthly sales across Europe plunged by nearly half in April compared to the same time last year. That trend extends the steep declines Tesla saw in the first quarter.
The investors who signed Wednesday's letter own about 7.9 million shares in the company combined. They blamed a Tesla board that's "unwilling to act in the best interest of all Tesla shareholders" by requiring Musk's "full-time attention" on the company.
Musk said this week that he plans to focus more on his businesses, which include xAI and SpaceX in addition to Tesla.
Those who signed the letter included the pro-labor SOC Investment Group, American Federation of Teachers, New York City Comptroller Brad Lander and Oregon State Treasurer Elizabeth Steiner.
The investors asked Tesla to add at least one new independent director with no personal ties to other board members. Tesla earlier this month said former Chipotle CFO Jack Hartung will join the company's board. Hartung previously worked with Musk's brother and Tesla board member Kimbal Musk, who was a board member at the Mexican food chain.
Tesla didn't respond to a request for comment in response to the letter.
Read the investors' letter in full here.
English (US) ·