Investors Demand Elon Musk's Full-Time Commitment to Tesla Amid Performance Concerns

Pension fund leaders with significant Tesla investments are urging the company's board to mandate that Elon Musk dedicate at least 40 hours per week to the electric vehicle manufacturer. Citing declining sales, stock volatility, and reputational concerns, these investors believe Musk's external activities are detrimental to Tesla's stability and future.

Investors Demand Elon Musk's Full Attention at Tesla

A coalition of pension fund leaders, collectively holding 7.9 million TSLA shares, has formally requested that Tesla's board ensure Elon Musk commits a minimum of 40 hours weekly to the company. In a letter to board chair Robyn Denholm, the investors expressed alarm over several critical issues:

• Stock Price Volatility: Significant fluctuations in Tesla's stock value.

• Declining Sales: A downturn in the company's sales figures.

• Human Rights Concerns: Disconcerting reports regarding Tesla's human rights practices.

• Plummeting Global Reputation: A noticeable decline in the company's worldwide standing.

Concerns Over Musk's External Engagements

The investors largely attribute these challenges to Musk's extensive involvement in other ventures, specifically highlighting his role in the U.S. Department of Government Efficiency (DOGE). They criticized the board for its perceived failure to secure Musk's "full-time attention" on Tesla. Key members of this group include the SOC Investment Group, the American Federation of Teachers, New York City Comptroller Brad Lander, and Oregon State Treasurer Elizabeth Steiner.

Calls for Enhanced Governance and Succession Planning

This demand comes as the Tesla board prepares for Elon Musk's next compensation plan, following the 2023 Delaware Court of Chancery ruling that rescinded his 2018 $56 billion package. Beyond the 40-hour workweek requirement, the investors also advocated for:

• A clear succession plan for leadership.

• Limits on directors' external board commitments to strengthen governance.

The letter also raised concerns about the independence of the board, noting the recent addition of former Chipotle CFO Jack Hartung, who has prior professional ties with Kimbal Musk, Elon's brother.

Musk's Vision Versus Shareholder Expectations

The investors' letter underscores a growing tension between Elon Musk's expansive vision for Tesla as an AI and robotics powerhouse and the more immediate concerns of shareholders regarding the company's stability and performance. During the Q4 and FY 2023 earnings call, Musk reiterated his desire for 25% voting control to maintain influence without complete ownership. He also voiced strong opinions about institutional shareholder services, referring to them as "activists that basically infiltrate those organizations and have strange ideas about what should be done."

As Musk plans to divide his focus among Tesla, xAI, and SpaceX, the board faces increasing pressure to reconcile his leadership style with shareholder expectations for long-term corporate stability and growth.