A coalition of pension fund leaders with significant long-term investments in Tesla Inc. has called on the company’s board to mandate that CEO Elon Musk dedicate at least 40 hours per week to Tesla. The investors cite concerns over declining sales, reputational damage, and what they characterize as Musk’s inconsistent attention to Tesla amid his involvement in other ventures.
In a letter addressed to Tesla board chair Robyn Denholm, the investors described the company as facing a "crisis" fueled in part by Musk's notable absences and a board seemingly reluctant to act decisively in the interests of all shareholders. They expressed apprehension regarding Tesla’s stock volatility, falling electric vehicle sales, troubling reports on human rights practices, and a significant drop in global brand perception.
The group recommended that Musk’s minimum time commitment of 40 hours per week become a prerequisite for any forthcoming compensation agreements. Additionally, they are advocating for a clear succession plan for Tesla’s executive management and a policy limiting outside board engagements for Tesla directors to ensure focused governance.
This move follows legal and investor scrutiny that previously resulted in the Delaware Court of Chancery invalidating Musk’s 2018 CEO pay package, valued at roughly $56 billion, citing conflicts of interest and inadequate shareholder information. Despite this, Musk is reportedly seeking additional shares that could amount to a 25% stake in Tesla.
Since 2024, Tesla’s market value and reputation have suffered largely due to Musk’s controversial public statements and political involvement, including his substantial financial contributions to political campaigns and endorsements of contentious parties abroad. Under Musk’s leadership of the U.S. Department of Government Efficiency (DOGE), there have been initiatives to reduce federal agency operations, attracting further scrutiny.
Tesla’s brand standing has sharply deteriorated, dropping from eighth to ninety-fifth in a recent ranking of America’s most popular companies. Concurrently, Tesla’s stock has declined by about 12% this year, lagging behind the broader Nasdaq index's modest 1% dip.
Operational data reveal that Tesla’s electric vehicle sales in Europe plummeted nearly 50% in April year-over-year, extending a pattern of steep declines observed previously.
The investors behind the letter collectively hold approximately 7.9 million Tesla shares. They criticized the board for not enforcing Musk’s consistent and full-time engagement with the company’s affairs. Musk, meanwhile, has indicated plans to allocate greater focus across his diverse portfolio of businesses, including xAI and SpaceX.
Notable signatories to the letter include the pro-labor SOC Investment Group, the American Federation of Teachers, New York City Comptroller Brad Lander, and Oregon State Treasurer Elizabeth Steiner, emphasizing broad institutional concern.
The group also urged Tesla to appoint at least one independent director with no direct personal associations to existing board members. Earlier this month, former CFO Jack Hartung, who has indirect ties to Musk’s family through Tesla board member Kimbal Musk, was announced as a new board member.
Tesla has not provided a formal response to the investors’ letter.
