By Trisha Thadani —
Tesla investors ask board to make Musk work full-time
A group of activist Tesla shareholders sent a letter to board chair Robyn Denholm Wednesday calling for guarantees that CEO Elon Musk devote at least 40 hours a week to the electric vehicle maker after spending much of the past year focused on federal politics.
The letter was signed by SOC Investment Group, which is sponsored by a coalition of labor unions, and other small investors that together own about 7.9 million Tesla shares – a minuscule fraction of the company’s 3.22 billion outstanding shares. It comes amid investor and employee frustration over the impact Musk’s role with the Trump administration has had on the company’s sales and reputation.
Tesla’s most recent earnings call last month revealed a 71 percent drop in profits and a 13 percent slide in sales compared to the same time in 2024. Experts and analysts largely attribute that hit to Musk’s work with the U.S. DOGE Service, where he has inspired sweeping job and budget cuts in the federal government. The company’s stock has fallen about 24 percent from a high in December 2024, though it has recovered in recent days as the billionaire says he is retreating from Washington politics to refocus on his companies.
“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 Musk’s full-time attention on Tesla,” the letter said. “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,”
Musk, Denholm and Tesla did not respond to requests for comment.
The letter also calls on Denholm to create a clear, long- and short-term succession plan for management and to outline a policy that specifically limits outside board commitments at other public and private companies. The shareholders also urge the board to appoint “at least one new truly independent director with no personal ties to other Board members.”
Tesla’s board has been criticized in the past for its deference to Musk. In a December 2024 ruling against restoring a $56 billion pay package that the board granted Musk in 2018, a Delaware judge criticized Musk’s close ties to members of the board, which include his brother. That case, brought in 2018 by a shareholder with only nine Tesla shares, prompted Musk to reincorporate Tesla in Texas.
Last month, the Wall Street Journal reported earlier this month that Tesla’s board was searching for a new CEO. Denholm called the report “absolutely false” in a post on X, writing, “the Board is highly confident in [Musk’s] ability to continue executing on the exciting growth plan ahead.”
Several of the signatories in Wednesday’s letter were also part of a group last year that opposed the ratification of Musk’s 2018 pay package, saying the CEO was too distracted by his several other companies. At the time, the group of investors said that “the Board continues to allow Musk to be overcommitted, not demanding that he devote his attention to his role as CEO and ‘Technoking’ of Tesla.”
