By Chris Isidore | CNN
A group of progressive Tesla shareholders want the company’s board of directors to make CEO Elon Musk concentrate more on one of his many jobs, that of running the EV automaker.
In a letter to the Tesla board, the group says that Musk is not spending enough time and attention focused on issues facing the company, including increased EV competition from other automakers, and addressing issues important to the group, including allegations of a toxic work environment at Tesla.
In addition to his role at Tesla, Musk also leads Twitter, SpaceX, the Boring Company, and Neuralink, among others.
“We each initially added Tesla to our portfolios because we saw Tesla as a true leader in producing products and services essential for our transition to a sustainable and green economy,” the letter said. “Over time, however, we have grown increasingly concerned with governance and leadership issues at the company.”
Among the entities signing the letter are Amalgamated Bank, a union-owned bank, as well as Sisters of St. Joseph of Carondelet, United Church Funds, Investor Advocates for Social Justice and the New York City Controller’s Office. The letter says that the investors signing the letter own $1.5 billion worth of Tesla shares, which represents well less than 1% of Tesla shares.
By comparison, Musk owns or has options to purchase about $118 billion worth of Tesla shares, representing 20% of the stock. Musk has a net worth of $175 billion, according to Forbes.
The letter alleges Musk’s lack of focus at Tesla is causing problems for the company, such as a high turnover rate with its staff due to its work environment. But it doesn’t spell out what should be done to make him focus on those problems.
“Tesla needs a board that will ensure that the CEO is focused on addressing its challenges,” said the letter. “Due to the board’s failure to restrict the CEO’s outside commitments and ensure he is focused on solving the many challenges the company faces, we have lost confidence in its members.”
Ivan Frishberg, chief sustainability officer at Amalgamated Bank, said that there are other investors who are concerned about Musk becoming distracted, especially with his recent purchase of Twitter, as well as his ownership and running of SpaceX and a number of other companies.
Frishberg said the group is not advocating that Musk be replaced at CEO.
“We’re a Tesla investor,” he said. “In terms of governance, we’d like the board room to become less clubby and more independent and responsive to investors.”
Musk is now essentially working for Tesla for free, with no cash salary, and after being granted a final block of stock options from a 2018 pay package earlier this year, there are no additional stock options that he can qualify for at the moment.
Some analysts have said that they expect, and would advocate, that Tesla announce a new pay package for Musk as a way to assure Wall Street that Tesla is still his priority, despite his other CEO jobs. But Frishberg objected to that idea.
“I don’t think throwing more money at the guy is the answer,” he said.
Source: Orange County Register
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