SAN FRANCISCO -- An activist firm representing Tesla Inc. shareholders has excoriated the electric car maker, claiming that it's veered off the path to profit and urging a major overhaul of the Elon Musk-led board.
CtW Investment Group, working with union pension funds that are Tesla investors managing more than $250 billion, opposes the re-election of three board members who are up for votes during Tesla's June 5 annual meeting. The firm calls for shareholders to cast ballots against Antonio Gracias, a private-equity investor and Tesla's lead independent director; Kimbal Musk, Elon's brother; and James Murdoch, CEO of Twenty-First Century Fox Inc.
"Tesla has failed to hit critical production milestones and has consequently seen its past progress toward profitability sharply reverse," Dieter Waizenegger, CtW's executive director, writes in a letter the firm plans to file Wednesday with the Securities and Exchange Commission. "But instead of recognizing the need for independent and effective board leadership, Tesla has re-nominated three directors who exemplify the company's failure to evolve."
The letter escalates long-held criticisms of a board that CtW and several investors have faulted for being beholden to Musk, Tesla's CEO. The company has burned through almost $4 billion during the past year while scaling up operations for the Model 3, intended to be its first mass-manufactured car. The sedan has missed several production targets and stoked concerns about whether the company has enough cash.