Tesla (TSLA) boss Elon Musk has been told by investors that he needs to spend 40 hours a week behind the wheel at the EV maker to avoid a corporate governance “crisis.”
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Bored Board
In a letter to the chair of Tesla, Robyn Denholm, written just a day before Musk announced that he was ditching his DOGE role in the White House, a group of 12 institutional investors said corporate governance reform at the group had become crucial.
The investors, including the American Federation of Teachers and the New York City comptroller, warned in the letter that the “long-term problems at the company stem from the CEO’s absence, which is amplified by a board that appears largely uninterested.”
The letter went on to state that any new wage plan for Musk should include a commitment to devote a minimum of 40 hours a week to running Tesla.
“Given Musk’s leadership roles at four private companies and his foundation, the board must ensure that Tesla is not treated as just one among many competing obligations,” the letter said.
Those other companies include social media site X, artificial intelligence venture xAI, SpaceX, Neuralink and the Boring Company.
Succession Planning
The letter also called on the board to create a succession plan that applies to the top executives, including Musk. Indeed, one investor told Musk that if he didn’t want to be the Tesla CEO anymore, then he should help the board find someone who does.
Tesla has had a tough year to date with its share price down nearly 12%. That’s down to increased competition, a need to refresh its models, slumping sales around the globe and Musk’s relationship with President Trump.
The share price has recovered as Musk first reduced his hours at DOGE and today left the building. But Tesla investors will clearly need a lot more convincing that his eye is back on the Tesla ball.
Is TSLA a Good Stock to Buy Now?
On TipRanks, TSLA has a Hold consensus based on 16 Buy, 10 Hold and 11 Sell ratings. Its highest price target is $500. TSLA stock’s consensus price target is $282.70 implying an 20.79% downside.
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