A group of large pension funds has demanded that Elon Musk commit to work at least 40 hours a week at Tesla, calling for corporate governance reforms to address a “crisis” at the carmaker.
The letter sent to Tesla chair Robyn Denholm on Wednesday was signed by 12 long-term institutional investors including the New York City Comptroller, the American Federation of Teachers, as well as European funds such as Denmark’s AkademikerPension. Together they manage about $950bn in assets.
Musk has clashed with activist shareholders previously but the co-ordinated effort by institutional investors to put pressure on him is unusual and marks an escalation in the funds’ efforts to drive change at the company.
While the letter’s signatories hold only 0.25 per cent of Tesla’s shares, the move highlights how the billionaire’s polarising position in US politics has made some asset managers more outspoken in challenging him.
“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.
To address rising shareholder concerns and falling sales, Musk has promised to refocus his efforts on Tesla and scale back his role in President Donald Trump’s administration. Tesla shares have bounced back since Musk’s announcement, but are still down 17 per cent from their peak in December.
Tesla did not immediately respond to a request for comment.
Musk has long been critical of activist investors using small stakes to wield influence.
A $54bn pay deal from 2018 has been twice rejected by a Delaware trial court after a challenge by a shareholder with about 200 shares. An appeal by Tesla is to be heard later this year.
The Financial Times reported this month that Tesla’s board had formed a committee to consider a new pay package for Musk.
The pension funds’ letter said any new remuneration plan for Musk should include a commitment to devote a minimum of 40 hours per week to run Tesla.
“Given Musk’s leadership roles at four private companies and his foundation, the Board must ensure that Tesla is not treated as just one among many competing obligations,” it added.
Musk has stated before that he needed a new pay package to remain focused on Tesla amid commitments to his other companies including social media group X, his artificial intelligence venture xAI, SpaceX, Neuralink and the Boring Company.
The pension funds worked with the SOC Investment Group, an investment arm of the Strategic Organizing Center — a coalition of trade unions that waged a proxy battle against Starbucks earlier this year and has become a symbol of the resurgent organised labour movement in America.
“I don’t think we know quite yet whether Tesla needs a new CEO,” Tejal Patel, executive director at SOC Investment Group, said. “The board should be using this really as a chance to get the company back on track.”
The letter also said Tesla’s board should design a succession plan that applies to the company’s top executives, and appoint a new director who is “truly independent . . . with no personal ties to other board members”.
Elizabeth Steiner, state treasurer of Oregon, who signed the letter, said: “If you’re not prepared to be the CEO of Tesla any more, that’s OK. Just help us figure out who the next CEO is.”
Musk last week said he would scale back his heavy political spending, and posted on social media that he would be putting more effort into his business empire.
“Back to spending 24/7 at work and sleeping in conference/server/factory rooms. I must be super focused on X/xAI and Tesla . . . as we have critical technologies rolling out,” he wrote on X.
Musk helped establish the so-called Department of Government Efficiency (Doge), which is seeking to cut trillions of spending from the US budget. But the controversial role has sparked a backlash against Tesla. Some consumers have shunned the brand, and it has faced protests at dealerships and vandals targeting its vehicles.
Randi Weingarten, president of the American Federation of Teachers, a US union representing members with $4tn in retirement investments, said: “It’s obvious that the company is in a crisis right now . . . and it needs intensive care right now.”
In late February, the AFT called on six large money managers — BlackRock, Vanguard, State Street, T Rowe Price, Fidelity and TIAA — to “reconsider” their position in the company following the sharp decline in Tesla’s share price.
Tesla shareholders have backed Musk and the board in pushing to reinstate his 2018 pay deal, and last year approved moving the company’s incorporation to the less onerous Texas.
