An open letter from investors says the company deserves a CEO 'whose time and attention align with the scale of the responsibilities at hand'
A group of Tesla investors is asking CEO Elon Musk to commit at least 40 hours a week to the automotive firm to address the challenges faced by the company.
The group made the demand in an open letter to Tesla Chair Robyn Denholm dated last May 28. Its signatories are institutional investors, including pension funds, unions, and the Illinois and Oregon State Treasurers, who collectively hold 7.9 million shares of Tesla, or 0.25% of the company.
"Any new compensation plan offered to CEO Musk should include a commitment to devote a minimum of 40 hours per week to the management of the company," the investors said in the letter.
Their remarks came amid Musk's multiple gigs across various organisations, where he holds leadership roles in SpaceX, X, xAI, and Neuralink.
Musk was also involved with the newly established Department of Government Efficiency (DOGE), which facilitated the widespread reduction of the US Federal workforce this year.
"Mr. Musk's outside endeavours 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," they said.
The investors' letter came just as Musk announced that he is leaving his "Special Government Employee" position in the US government.
"As my scheduled time as a Special Government Employee comes to an end, I would like to thank President @realDonaldTrump for the opportunity to reduce wasteful spending," he said on X. "The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government."
Prior to his step down, Musk has also made remarks indicating that he would be bringing his attention back to the organisations that he leads.
"Back to spending 24/7 at work and sleeping in conference/server/factory rooms," he said on X last week, after the platform suffered an outage.
In the same post, he also underscored his focus on Tesla amid the rollout of "critical technologies."
Musk also previously acknowledged that his days are "very long and complicated," with a "great deal of context switching."
According to the CEO, he generally tries to divide his schedule "so it's predominantly one company on one day," CNBC reported.
But the group of Tesla investors said the Board must ensure that Tesla is "not treated as just one among many competing obligations" for Musk.
"In any case, Tesla deserves a CEO whose time and attention align with the scale of the responsibilities at hand — particularly in light of recent performance challenges, strategic uncertainties, and the company's evolving competitive landscape," they said in the letter.
"It is the Board's fiduciary duty to structure compensation in a way that incentivises meaningful, sustained engagement — not merely symbolic presence."
Meanwhile, the investors are also asking Tesla's board to adopt and disclose a clear succession plan for management.
"We recommend the succession plan address both planned and unplanned or 'emergency' departures, with a two-to-five-year time frame to begin searches for planned departures," they said.
According to the investors, the company's current disclosure regarding the CEO succession plan does not give assurance that the board is adequately prepared to bring on a new individual to execute Tesla's business plans.
"The Board should adopt and disclose a succession plan that includes the goals of the plan, strategies on internal candidate development and the development of a talent pipeline, as well as the criteria for when an outside search firm should be engaged," they said.
The investors issued the demands as they pointed out the need for reforms to address the company's leadership amid challenges faced by the company.
"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," they said.
"The current crisis at Tesla puts into sharp focus the long-term problems at the company stemming from the CEO's absence, which is amplified by a Board that appears largely uninterested and unwilling to act in the best interest of all Tesla shareholders by demanding Mr. Musk's full-time attention on Tesla."
