Pension Fund Leaders Call for Elon Musk to Dedicate 40 Hours per Week to Tesla
A group of pension fund leaders holding a combined 7.9 million shares in Tesla have urged the company’s board to mandate Elon Musk to dedicate at least 40 hours per week to the electric vehicle maker. The investors cited a looming crisis facing Tesla due to stock price volatility, declining sales, reports on human rights practices, and a plummeting global reputation. In a letter addressed to board chair Robyn Denholm, the group expressed serious concerns about the company’s future.
The investors attributed many of Tesla’s challenges to Musk’s external activities, including his involvement in the U.S. Department of Government Efficiency (DOGE). They criticized the board for failing to ensure Musk’s full-time attention on Tesla, raising questions about governance and board independence. The group includes prominent names such as the SOC Investment Group, the American Federation of Teachers, New York City Comptroller Brad Lander, and Oregon State Treasurer Elizabeth Steiner.
Concerns Over Musk’s Compensation Plan and Board Governance
The investors’ letter coincides with discussions around Elon Musk’s next compensation plan, following a court ruling in 2023 that rescinded his $56 billion package from 2018. In addition to the 40-hour workweek requirement, the investors called for a clear succession plan and limits on directors’ external board commitments to strengthen governance. They highlighted the recent addition of former Chipotle CFO Jack Hartung to the Tesla board, raising concerns about potential conflicts of interest.
Elon Musk’s ambitious vision for Tesla was evident during the Q4 and FY 2023 earnings call, where he outlined plans for the company to become a leader in AI and robotics. Musk emphasized the importance of maintaining voting control to influence the company’s direction while addressing challenges from institutional shareholders like Institutional Shareholder Services (ISS) and Glass Lewis.
Aligning Musk’s Leadership with Long-Term Stability
As Musk juggles responsibilities at Tesla, xAI, and SpaceX, the investors’ demands underscore the tensions between his expansive vision and shareholder expectations. With Tesla facing stock volatility and reputational challenges, the board is under pressure to ensure that Musk’s leadership aligns with the company’s long-term stability. Finding a balance between Musk’s innovative ideas and the need for corporate governance will be crucial for Tesla’s future success.