Tesla board gets an earful from eight state treasurers over Elon Musk’s focus

By Dana Hull | Bloomberg

The treasurers of eight US states have written an open letter to Tesla Inc.’s board of directors questioning the direction of the company and the level of attention Elon Musk is paying to its mounting challenges.

The overseers of funds and investments for California, Illinois and half a dozen other states cite Tesla’s sagging stock, disappointing first-quarter deliveries and surge of trade-ins by vehicle owners as being among their causes for concern.

“Meanwhile, CEO Elon Musk continues to divide his attention across multiple companies and a high-profile advisory role within the federal government,” the treasurers wrote. “These external commitments raise serious questions about whether Tesla’s leadership is fully engaged in addressing the company’s core challenges.”

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The letter — pulled together in coordination with the advocacy group Americans for Responsible Growth — heaps more pressure on Tesla and Musk ahead of the company releasing first-quarter earnings results after the close Tuesday.

The carmaker’s stock has plunged more than 50% from an all-time high reached in mid-December, when investors initially viewed Musk’s proximity to then President-elect Donald Trump as a positive. The role the Tesla CEO has played in advising the administration has instead sparked a global backlash against Musk and his most valuable company.

California’s Malia Cohen, Illinois’ Michael Frerichs and the six other treasurers warn that if Tesla continues to falter, it “will ripple through regional economies” and shake public confidence in the energy transition.

Although Musk moved Tesla’s headquarters to Austin from Silicon Valley in 2021, California is still home to several of the company’s manufacturing and engineering facilities. Several of the states whose treasurers signed the letter — including Washington, Massachusetts, Colorado and Connecticut — have adopted California’s standards aimed at boosting sales of electric vehicles.

In the letter addressed to Robyn Denholm, Tesla’s chair, the treasurers ask the board to clarify how it’s ensuring that Musk and his leadership team are “devoting adequate time and focus to resolving recent performance issues.” The state officials also prod Tesla directors about their approach to executive compensation and how they plan to restore investor confidence.

“The board’s role is especially critical now — to provide strong oversight, uphold fiduciary standards and ensure that the company’s leadership is aligned with the long-term best interests of the company,” the treasurers wrote. “Public officials like us do not take the step of raising these concerns lightly except when the obvious risks demand it.”

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