(Reuters) -Treasurers of seven U.S. states have raised concerns about Tesla CEO Elon Musk’s lack of focus on the electric vehicle maker, given its significance in regional industries, innovation and employment.
Tesla deliveries plunged 13% in the first quarter due to backlash against Elon Musk’s politics, rising global competition and people waiting for a refresh to its highest-selling electric vehicle Model Y. Its stock has also fallen about 40% this year.
“Meanwhile, CEO Elon Musk continues to divide his attention across multiple companies and a high-profile advisory role within the federal government,” Americans for Responsible Growth, an advocacy group representing the Democratic state treasurers, said in an open letter to the board dated April 17.
“These external commitments raise serious questions about whether Tesla’s leadership is fully engaged in addressing the company’s core challenges.”
The treasurers also pointed to the need for companies such as Tesla to “return to a stable and focused trajectory” in an uncertain economic environment.
If Tesla falters, the effects will not be confined to shareholders, but will be felt across regional economies, workforce pipelines and public confidence in the energy transition, California State Controller Malia Cohen and seven state treasurers, including Washington’s Mike Pellicciotti and Illinois’ Michael Frerichs, said.
The treasurers asked the board to clarify how Musk and the Tesla board were ensuring that adequate time and effort was being put into resolving the company’s underperformance, and how the board was evaluating whether executive compensation was aligned with shareholder value and corporate accountability.
Tesla is set to report its first-quarter results after the market closes.
(Reporting by Kritika Lamba in Bengaluru; Editing by Anil D’Silva)
Brought to you by www.srnnews.com
