Tesla is under mounting pressure from critical shareholders who want the company to enact major changes in its ranks and operations. A group of investors, including pension funds and state treasurers, has sent a formal letter to Tesla’s board detailing serious concerns and calling for urgent action.
Here’s what you need to know:
40-Hour Work Week Demand:
At the core of the requests is Tesla’s CEO Elon Musk promises that at the very least he will work 40 hours as week for his electric vehicle company. The demand comes amid worries over Musk’s other business ventures and activities taking attention away from Tesla.
Succession Planning:
Shareholders also are pushing for a more explicit and muscular chief executive succession plan. They focus on the necessity of a succession plan if Musk himself is not available. One name that isn’t on the earnings report is Elon Musk. This call brings up the question of Tesla putting all its eggs in one basket.
Reducing External Engagement:
The investors are calling on the board to adopt measures intended to curtail the outside business interests of Tesla’s directors. They want to ensure that board members are spending enough time focusing on the oversight of Tesla.
Independent Board Members:
There is also a call for the recruitment of genuinely independent board members who have no personal connections with current directors. This is to protect independence of the Board and operation in the interest of all stakeholders.
Worries about Tesla’s execution:
Investors have become alarmed by Tesla’s falling sales, stock gyrations and battered image worldwide. They put a lot of these problems on Elon musk’s extracurricular activities.
The push from shareholders is an indication of mounting concerns over Tesla’s governance and whether Musk’s myriad other pursuits may be hurting the company’s performance. The investment firms’ requests signal a new push for greater oversight and a return to Tesla’s core business.