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Rubén Andrés
WriterWriter at Xataka. I've been working remotely for more than a decade and I'm a strong advocate of technology as a way to improve our lives. Full-time addict of black, sugar-free coffee.
Karen Alfaro
WriterCommunications professional with a decade of experience as a copywriter, proofreader, and editor. As a travel and science journalist, I've collaborated with several print and digital outlets around the world. I'm passionate about culture, music, food, history, and innovative technologies.
Tesla CEO Elon Musk has cultivated an image as a tireless worker. He’s said he works more than 100 hours per week and once slept in his Tesla office to help save the company from bankruptcy. Proud of that reputation, Musk didn’t hesitate to demand the same from his employees.
However, a group of Tesla investors sent the company’s board of directors a surprising request: that Musk devote at least 40 hours a week to running Tesla. The request comes at a critical moment. According to shareholders, Tesla is in one of its worst crises, and Musk’s leadership faces more scrutiny than ever.
Musk, focus! Debate over Musk’s commitment to Tesla has intensified after his recent foray into politics. The signatory investors—including the American Federation of Teachers, which owns 7.9 million Tesla shares—say the CEO has become too distracted. They now want concrete measures to ensure good governance and stability at the company.
In their letter to board chair Robyn Denholm, the investors wrote, “Mr. Musk’s outside endeavors appear to have diverted his time and attention from actively managing Tesla’s operations, as any other chief executive officer of a publicly traded company would be expected to do.” Musk has admitted he can barely devote 40 hours a week to running his companies.
Forty hours per week and a three-day workweek. In the letter, investors asked that any new compensation plan for Musk include a requirement to spend at least 40 hours per week managing Tesla.
They suggest Musk group those hours into three days and use the remaining two weekdays for his other business or political activities. “We just want to make sure that individuals are able to actually dedicate enough time to oversee and, in the case of executives, to manage the company appropriately,” Tejal Patel, CEO of SOC Investment Group, one of the signatories, told Fortune.
A plan to replace the CEO. Shareholders also want the board to develop a clear CEO succession plan. They are not calling for Musk’s immediate replacement, as some Tesla employees have.
Instead, they ask the board to identify emergency successors who could step in if Musk becomes unavailable. The goal is to bring in someone with the skills to execute Tesla’s business plans. They want the board to publish these plans along with a two- to five-year strategic timeline. That would give Tesla a protocol and prevent the company from being left “headless” in a crisis.
Executives should be restricted. Alongside the call for more involvement from Musk, investors also want limits placed on Tesla executives’ responsibilities at outside companies.
This measure aims to avoid conflicts of interest and ensure leaders are focused fully on Tesla. “For many years, the amount of time CEO Musk has devoted to managing Tesla has been constrained because of his multiple privately held companies and other outside endeavors,” the letter states. Investors propose that top executives hold only one executive role outside of Tesla.
They want a board loyal to Tesla. The letter doesn’t only target Musk. Investors also criticized Tesla’s board of directors and demanded the addition of at least one “truly independent” member.
That individual should have no ties to other board members or Elon Musk to prevent nepotism and avoid personal conflicts of interest. This request follows the appointment of Jack Hartung, a former Chipotle executive, to Tesla’s board. Investors voiced concerns about Hartung’s ties to Kimbal Musk, Elon Musk’s brother.
They argue the board needs independence to negotiate executive compensation without favoritism. For example, Musk’s 2018 salary bonus was negotiated by a board that included longtime collaborators and even his brother—raising concerns about shareholder representation.
Image | Gage Skidmore
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