New York CNN
A group of progressive Tesla investors wants the board of directors of the company to focus CEO Elon Musk more on his job of running the EV carmaker.
The group claims that Musk does not spend enough time and energy on the issues that face the company. This includes increased competition from other automakers in the EV market, as well as addressing important issues to the group.
Musk is not only the CEO of Tesla (TSLA), but also SpaceX, Neuralink, Twitter and other companies.
The letter stated that 'we each added Tesla to our respective portfolios initially because we saw Tesla a leader in producing essential products and services for our transition to sustainable and green economies'. Over time, we became increasingly concerned about the governance and leadership of the company.
Amalgamated Bank is a union owned bank. Other entities that have signed the letter include Investor Advocates for Social Justice, New York City Controller's Office, United Church Funds and Sisters of St. Joseph of Carondelet. According to the letter, the investors who signed the letter hold $1.5 billion in Tesla shares. This is less than 1%.
Musk, on the other hand, owns or holds options to buy shares of Tesla worth $118 billion, which is 20% of the company. Forbes estimates that Musk's net worth is $175 billion.
The letter claims that Musk's lack focus at Tesla has caused problems for the company. For example, a high staff turnover rate due to the work environment. It doesn't say what to do in order for him to focus on these problems.
The letter stated that Tesla needed a board to ensure the CEO was focused on the company's challenges. We have lost faith in the board members because they failed to limit the CEO's external commitments and make sure he was focused on solving all the challenges that the company faced.
Ivan Frishberg is the chief sustainability officer of Amalgamated Bank. He said that other investors are worried about Musk getting distracted, particularly with his recent acquisition of Twitter as well as SpaceX, his ownership, and his running of a number other companies.
Frishberg stated that the group does not advocate Musk being replaced as CEO.
He said, "We are a Tesla Investor." In terms of governance we would like to see the boardroom become more independent and responsive towards investors.
Musk now works for Tesla essentially for free. He does not receive a salary and, after receiving a final stock option block from his 2018 pay package in early 2018, he is no longer eligible for any additional stock options.
Analysts have stated that they would expect and advocate that Tesla announce a brand new pay package for Musk to assure Wall Street, that Tesla remains his top priority, despite the other CEO positions he holds. Frishberg, however, was not a fan of that idea.
He said, "I don't believe that throwing more money at him is the solution."