Sunita Somvanshi
Major Tesla shareholders are demanding CEO Elon Musk commit at least 40 hours per week to the electric vehicle maker amid what they describe as a company “crisis.” The investors, who control 7.9 million shares, sent an urgent letter to board chair Robyn Denholm outlining specific demands to address Tesla’s declining performance.
The shareholder coalition, including pension funds, the American Federation of Teachers, and state treasurers from New York, Oregon, and Illinois, blame Tesla’s troubles on Musk’s divided attention between the company and his other ventures. Their concerns come as Tesla’s stock has fallen 12% this year while the Nasdaq declined only 1%.
“Tesla’s stock price volatility, declining sales, as well as disconcerting reports regarding the company’s human rights practices, and a plummeting global reputation are cause for serious concern,” the investors wrote in their letter.
Sales figures underscore their worries. Tesla’s European deliveries dropped nearly 50% in April compared to last year, while global EV sales declined in the first quarter. The company’s reputation has also taken a hit, falling from 8th to 95th place in the Axios Harris Poll of America’s most admired brands.
Beyond the 40-hour work week requirement, shareholders made three additional demands:
First, they want a formal CEO succession plan that identifies emergency replacements should Musk become unavailable. “We believe the company’s current disclosure regarding the CEO succession plan does not assure investors that the Board is adequately prepared,” they stated.
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Second, they called for limits on directors’ external business commitments, proposing that executive directors be restricted to one additional board position and one executive role at another company.
Third, they demanded the appointment of at least one “truly independent” board member with no personal ties to existing directors. They criticized the recent appointment of former Chipotle CFO Jack Hartung, noting his family connections to Tesla and previous association with Musk’s brother Kimbal, who serves on Tesla’s board.
The timing is significant as Musk just concluded his role at the Department of Government Efficiency (DOGE) under the Trump administration, where he served as a Special Government Employee for 128 days leading cost-cutting efforts.
Following his DOGE exit, Musk stated on social media that he would “focus more” on his businesses, including Tesla, SpaceX, and xAI. However, shareholders remain skeptical. Illinois State Treasurer Michael Frerichs questioned whether Musk has learned from his mistakes or will continue prioritizing other ventures over Tesla’s urgent needs.
The letter comes amid ongoing tensions over executive compensation. In January, a Delaware judge struck down Musk’s 2018 pay package—once valued at $56 billion—ruling that the board misled investors. Musk has since demanded a new arrangement that would grant him 25% voting control of the company.
Prominent Tesla analyst Dan Ives of Wedbush Securities welcomed Musk’s departure from DOGE, calling it “music to the ears of Tesla shareholders” and expressing hope that Musk would now be “laser focused on Tesla and the autonomous vision ahead.”
