Pension funds holding Tesla stock want CEO Elon Musk to get back to work.
A group of institutional investors holding approximately 7.9 million shares of Tesla signed a letter to the electric vehicle maker’s board chair Robyn Denholm, asking the company to reform corporate governance and address deficiencies in the board’s oversight.
“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 letter stated.
A number of investors, including the American Federation of Teachers and Denmark’s Akademiker Pension, among others, have either called for a review of their Tesla holdings or have already unloaded their shares in the company.
The dozen signatories to the letter included Akademiker Pension; the American Federation of Teachers; Brad Lander, New York City Comptroller; Elizabeth A. Steiner, Oregon State Treasurer, and Michael W. Frerichs, Illinois State Treasurer. Lander serves as the custodian and a trustee of the $284.2 billion New York City Retirement Systems.
40 hours a week
The letter also raised concerns about Musk activities outside of his duties running the company, including his “high-profile role” as an architect of the U.S. Department of Government Efficiency in the Trump administration.
Musk’s outside endeavors, the letter cited, “appear to have diverted his time and attention from actively managing Tesla’s operations, as any other chief executive officer of a publicly traded company would be expected to do.”
The current crisis at Tesla “puts into sharp focus the long-term problems at the company stemming from the CEO’s absence, which is amplified by a board that appears largely uninterested and unwilling to act in the best interest of all Tesla shareholders by demanding Mr. Musk’s full-time attention on Tesla.”
To remedy some of these issues, the letter urged the board, to among other things, have Musk make a commitment to devote a minimum of 40 hours per week to the management of the company; ensure that Tesla is not treated as just one among many of Musk’s competing obligations; structure compensation in a way that incentivizes meaningful, sustained engagement; and adopt and disclose a clear succession plan for management.
The letter specified that any new succession plan should address both planned and unplanned or “emergency” departures, with a two-to-five-year time frame to begin searches for planned departures.
In addition, the pension funds asked the Tesla board to appoint at least one new independent director with no personal ties to other board members.
As an example, the new Tesla director John Hartung, the former chief financial officer of Chipotle, has a son-in-law who is currently employed by Tesla. Tesla’s current board members, the letter added, have extensive business and personal relationships with Musk, thereby compromising the board’s independence.
Tesla’s stock price has plunged by more than 24% since its reaching a peak in December 2024, while first quarter 2025 sales fell 13% year-over-year.
