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A rough week for Elon Musk was capped Friday when institutional shareholders in Tesla admonished the company’s board of directors to rein in an “over-committed” CEO in an open letter.
The letter follows the midair explosion of the SpaceX Starship rocket in its first test flight Thursday and a first-quarter Tesla earnings report Wednesday that saw net income decrease more than 20% from the prior year on narrowing margins. The report sent Tesla shares down almost 10% Thursday and erased nearly $13 billion from Musk’s net worth, according to the Bloomberg Billionaires’ Index.
Musk also waded into controversy with Twitter again, eliminating verified status from the accounts of most nonpaying subscribers and eliminating markings for government officials and accounts, raising the specter of impostors running rampant on the platform.
What the letter says
The Tesla investors, who say their holdings amount to more than $1.5 billion, want the board to bring in more independent members and work harder to solve issues at the company that can pose “substantial legal, operational, and reputational risks” to the electric vehicle maker, “jeopardizing its long-term value.”
The investors are particularly concerned with Musk and Tesla’s handling of human rights and workers’ rights. Their letter recounts many lawsuits in which Tesla has been sued over racial discrimination, union-busting, wage theft, sexual harassment and unsafe working conditions.
“Tesla appears to be embracing a broader culture of being ‘above the law,'” they wrote, adding that Tesla now faces criminal probes by the U.S. Department of Justice, the National Highway Traffic Safety Administration and California’s Department of Motor Vehicles over its Autopilot technology and claims about self-driving.
“Instead of working to address problems with regulators, CEO Musk has made derogatory tweets and comments, fueling tensions,” they wrote.
The open letter to Tesla’s board comes after Tesla shares have declined more than 15% over the past month.
Nia Impact Capital’s Kristin Hull told CNBC the letter is meant as a “call to action” and she is hoping that Tesla Chair Robyn Denholm will take the time to write a meaningful reply, at a minimum. “We want to see the board take their job seriously — we don’t see them doing a good job at being Elon Musk’s boss.”
Eroding margins, exploding rockets
While shares of Tesla were ticking higher in early trading Friday, the company’s first-quarter…
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