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A group of large pension funds demand that Elon Musk commit to working at Tesla at least 40 hours a week, and are calling for corporate governance reforms to deal with the “crisis” for automakers.
The letter sent to Tesla Chair Robin Denholm on Wednesday was signed by 12 long-term institutional investors, including European funds, including New York City Secretary, the American Federation of Teachers and supporters of Danish Academy Cars. Together, they manage approximately $9500 billion in assets.
Musk had previously clashed with activist shareholders, but the coordinated efforts by institutional investors to put pressure on him are unusual, indicating an escalation of financial efforts to drive change in the company.
The letter’s signatories hold only 0.25% of Tesla’s stake, but the move highlights that the billionaire’s polarizing position in American politics has become more openly by some asset managers challenging him.
“Tesla’s current crisis focuses on the long-term issues of the company due to the absence of a CEO, amplified by a board of directors who do not seem to want to act in the best interest of all Tesla shareholders by demanding Musk’s full-time attention to Tesla,” the letter states.
To address growing concerns among shareholders and declining sales, Musk has refocused his efforts on Tesla and pledged to reduce his role in President Donald Trump’s administration. Tesla stocks have bounced back since the announcement of the mask, but have fallen 17% since its December peak.
Tesla did not immediately respond to requests for comment.
Musk has long been critical of activist investors using small bets to use influence.
The $54 billion wage transaction from 2018 was rejected twice by a Delaware court court after a challenge by approximately 200 shares of shareholders. The Tesla complaint will be heard later this year.
The Financial Times reported this month that Tesla’s board of directors has established a committee to consider Musk’s new pay package.
Musk has pledged to refocus his efforts on Tesla and reduce his role in President Donald Trump’s administration © Kevin Carter/Getty Images
The Pension Fund letter said Musk’s new compensation plan should include a commitment to spending at least 40 hours a week to run Tesla.
“Given the four private companies and his mask leadership role in his foundation, the board must ensure that Tesla is not treated as just one of many competing obligations,” he added.
Musk previously said that amid commitments to other companies such as social media group X, his artificial intelligence venture Xai, SpaceX, Neuralink and boring companies, that he needs a new pay package to focus on Tesla.
The Pension Fund collaborated with SOC Investment Group, the investment division of the Center for Strategic Organizations. This is a coalition of labor unions that launched a power of attorney with Starbucks earlier this year and became a symbol of America’s revived organized labor movement.
“I don’t think we’re yet at all sure if Tesla needs a new CEO,” said Tejal Patel, executive director of SOC Investment Group. “The board really needs to use this as an opportunity to get the company back on track.”
Musk and Trump to participate in a wrestling competition in Pennsylvania in March © Brendon Smialowski/AFP
The letter also said that Tesla’s board should design succession plans that will be applied to the company’s chief executives and appoint a new director who is “really independent.”
“If you’re not ready to be Tesla’s CEO, that’s fine. Help us understand who the next CEO is,” said Elizabeth Steiner, Oregon’s state treasurer, who signed the letter.
Musk posted on social media last week that he would make more effort to his business empire, saying he would cut back on his heavy political spending.
“I’m going back to spending 24/7 at work and sleeping in a meeting/server/factory room. I have to be very focused on X/Xai and Tesla.
Musk helped establish the so-called Office of Government Efficiency (DOGE), which is seeking to cut trillions of spending from the US budget. However, the controversial role sparked a backlash against Tesla. Some consumers are eschewing the brand and are facing protests with dealers and vandals targeting the vehicle.
Randy Weingarten, president of the American Federation of Teachers, is a US union representing $400,000 members in retirement investments, saying, “It’s clear that the company is in crisis right now.
In late February, AFT called out six major managers: BlackRock, Vanguard, State Street, T Rowe Price, Fidelity and Tiaa following a sharp decline in Tesla’s stock price.
Tesla shareholders supported Musk and the board in pushing to revive the 2018 wage deal, and last year approved the company’s establishment to move to Texas’ troubling.
