Benzinga - In an open letter to Tesla Inc.'s (NASDAQ: TSLA) board of directors on Friday, a group of shareholders expressed their dismay with CEO Elon Musk, claiming he was being distracted by commitments to other ventures such as Twitter.
In the letter, the group — which included Amalgamated Bank (NASDAQ: AMAL), Investor Advocates for Social Justice, the New York City Comptroller's Office and Sisters of the Good Shepherd — criticized the billionaire entrepreneur for allowing Tesla to lose market share in the electric vehicle market while running multiple companies like Twitter, SpaceX and The Boring Company.
"The Board has allowed the CEO to be overcommitted at a time when the company faces critical challenges, including increased competition, regulatory scrutiny, and a stock slide," the group wrote.
"Corporate boards can and should intervene if a chief executive appears distracted or overly focused on other ventures," it added.
The shareholders urged the board to ensure that Tesla has a CEO that "dedicates adequate time and attention to the company" and to "overhaul the composition of the Board, including rolling off directors with close ties to the CEO."
"Without a full-time CEO and a Board willing to provide meaningful oversight, we are concerned that Tesla will not be prepared to effectively navigate the increasingly competitive environment for EV sales, the evolving global regulatory landscape, shifting consumer preferences, ongoing supply chain challenges, and investors' expectations," the shareholders argued.
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"Due to the board's failure to restrict the CEO's outside commitments and ensure he is focused on solving the many challenges the company faces, we have lost confidence in its members," the group further wrote.
Speaking to CNN, Ivan Frishberg, the chief sustainability officer at Amalgamated Bank, reiterated that investors were concerned about Musk's distractions but stopped short of calling for Musk's replacement.
"We're a Tesla investor," he said. "In terms of governance, we'd like the board room to become less clubby and more independent and responsive to investors."
The letter noted that the investors who signed the letter own $1.5 billion worth of Tesla shares, which make up well less than 1% of all Tesla shares. The group requested a meeting with the Tesla board to discuss its concerns and suggested solutions by May 25.
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Photo: NVIDIA Corporation via flickr
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