A number of significant pension funds have requested that Elon Musk make a commitment to working at Tesla for a minimum of forty hours per week. They are also demanding for corporate governance reforms to address what they call a “crisis” at the automobile manufacturer.
There were twelve long-term institutional investors who signed the letter that was delivered to Tesla chair Robyn Denholm on Wednesday. These investors included the New York City Comptroller, the American Federation of Teachers, and European funds such as Denmark’s AkademikerPension. Together, they are responsible for managing assets worth approximately $950 billion.
However, the coordinated effort by institutional investors to put pressure on Musk is uncommon and represents an escalation in the funds’ efforts to push change at the company. Musk has previously been involved in conflicts with activist shareholders.
The move underscores how the billionaire’s polarizing role in US politics has made certain asset managers more outspoken in confronting him. Despite the fact that the signatories of the letter hold only 0.25 percent of Tesla’s shares, the move highlights how the billionaire took this position.
In the letter, it was stated that “the current crisis at Tesla puts into sharp focus the long-term problems at the company stemming from the CEO’s absence.” These problems are exacerbated by a Board that appears to be largely uninterested and unwilling to act in the best interest of all Tesla shareholders by demanding Musk’s full-time attention on Tesla.
Musk has pledged to refocus his attention on Tesla and reduce his position in the government of President Donald Trump in order to address the growing worries of shareholders and the decline in sales. Despite the fact that Tesla shares have recovered since Musk’s statement, they are still down 17 percent from their all-time high in December.
In response to a request for comment, Tesla did not immediately provide a response.
Since the beginning of his career, Musk has been a critic of activist investors who use small stakes to exert influence.
Following a lawsuit by a shareholder who has around 200 shares, a Delaware trial court has twice rejected a pay package that was worth $54 billion that was negotiated in 2018. In the latter part of this year, an appeal filed by Tesla will be heard.
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