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Will Elon Musk start filling out timesheets? The world’s wealthiest man is under pressure to act like the regular CEO of electric car manufacturer Tesla. He even makes some gestures in that direction. Expectations on a regular CEO schedule should be at best low-key.
Musk on Wednesday called time on his role in so-called government efficiency. He has many other things that occupy his day and night. There is Social Network X and its new AI division, Xai. Added to its rocket maker SpaceX and Brain mapping company Neuralink.
With such a packed diary, some Tesla investors wonder where they’ll fit. On Wednesday, shareholders, including the New York City Pension Fund, requested the Tesla committee that the masks commit to the automaker at least 40 hours. They collectively own around 0.2% of Tesla stocks, but their upset can make others on their side.
Musk is the typical superstar chief executive and Irascible and undeniable value creator. However, the shareholders of the long leash given him may now be less loose. Tesla’s stock is almost the fifth-largest since December, even after a recent rally. Delivery fell 13% in the first quarter from the previous year.
For shareholders, responsibility may be sitting on Tesla’s board of directors, and ultimately taking the task seriously. The directors have established an independent committee to consider Musk’s new compensation plan. It must be big to motivate the mercury mastermind. He already has $150 billion in stake in the company.
The problem is that shareholders are primarily supporting Tesla’s departure from governance norms. Last year, they voted by the majority in favor of a $56 billion wage deal that a judge found to have been inappropriately awarded. They also approved the company’s residence to be moved to Texas. This has been jurisdiction since it restricted shareholder rights.
Some of the dissident proposals can be achieved without cramping the mask style, such as creating succession plans and adding truly independent board members. Many current Tesla managers have personal or professional relationships with Musk. The company recently settled a hundred million dollar lawsuit over allegations that the director had overpayment.
Musk’s pledge to focus on his entrepreneurial empire may be sufficient. Being obsessed with Tesla in 2018 when production was on the rise, proved to be a game-changer. That success made the mask richer and more influential than ever before, but it left him “fraying” and robbing him of sleep.
But Tesla is extraordinary, and that’s the point for many investors. Other companies with volatile businesses and distracting chief executives would have long ago faced activist campaigns to exchange or add board members. It’s up to musk to decide whether he wants to grind the way he used to. It’s up to the shareholders to make them happy as passengers, as is the case.
sujeet.indap@ft.com
