A group of influential Tesla investors is urging the electric vehicle company’s board of directors reshuffled to include people with no affiliation to CEO Elon Musk.
Five investment groups, including the California State Teachers Retirement System and CtW Investment Group, want Tesla to have its directors re-elected annually. They also believe the maker of the Model S and Model X should create a barrier between the board and Musk, who owns more than 20 percent of the company.
“We expect that as companies make the transition to publicly-traded status, the governance structures and practices in place at the time of the IPO will evolve to align with the company’s changing strategy,” they wrote in a letter Wednesday to the company. Tesla’s board remains unchanged from its pre-IPO days.
Tesla’s board is a who’s who of Musk affiliates and family members – it includes Kimbal Musk, the CEO’s brother, and Brad Buss, who served as chief financial officer at SolarCity, a solar panel provider Tesla acquired last year. Elon Musk owned nearly 19 percent of the bedraggled solar panel company before the merger.
CtW, which owns more than 200,000 shares of Tesla, made similar requests last year when Tesla was considering a move on SolarCity.
The group said the market’s “hostile reaction” to the SolarCity deal was induced, in part, because investment manager Donald Kendall was the only person on the solar company’s board without deep-rooted ties to Musk. The investment group also sought to forbid immediate family members of the senior executive team from concurrently serving on the board.
The Wednesday letter comes as Tesla continues to make inroads in the automaker.
The California-based automaker raised its market capitalization to $51 billion, a number that is valued at about $1.7 billion more than GM. The two companies wrestled for supremacy during early trading Monday. Tesla sold less than 80,000 vehicles in 2016. GM and Ford, meanwhile, sold 10 million and 6.7 million, respectively.
Musk was defiant Wednesday, telling his Twitter followers that, “[t]his investor group should buy Ford stock. Their governance is amazing…”
He did promise to follow up soon on an earlier promise to appoint more independent directors, “but this (investor) group has nothing to do with it.”
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