Elon Musk's brother should be booted off Tesla's board as the company's looking 'more tenuous than ever'
- Tesla should remove Kimball Musk, James Murdoch, and Antonio Gracias from its board, an activist investor group said Wednesday.
- CtW Investment Group said the company's "continuing success looks more tenuous than ever."
- Follow Tesla's stock price in real-time here.
A group of activist investors wants to radically shake up Tesla's board of directors.
CtW Investment Group, which represents some $250 billion worth of union pension investments, is urging shareholders to vote against the reappointment of three Tesla board member's, including Kimball Musk, the brother of CEO Elon Musk, at the company's annual meeting next month.
"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," Dieter Waizenegger, the group's executive director, said in a letter Wednesday. "We admire Tesla as successful innovator with an environmental mission; however, its continuing success looks more tenuous than ever."
Elon's brother, Kimball, has served on Tesla's board since February of 2017, but CtW says there's no reason - other than nepotism - for him to stay on, noting he "has no professional experience in the auto industry, and has proven ineffective as a public company director at Chipotle."
Kimball, who owns a small restaurant chain called The Kitchen Cafe as well as an urban farming venture, lacks "any relevant industry experience or possessing a track record of effective public company board service," the group said.
Other board members CtW hopes to replace include Antonio Gracias, who has served as lead director of Tesla's board since February 2017, and James Murdoch, son of the British media mogul Rupert Murdoch, who has been a board member since July 2017.
"While adding new directors was a step in the right direction, the choice of Mr. Murdoch as one of those directors does not appear well considered, given his troubled history as an executive and director, the disturbing parallels between nepotistic practices at Fox and Tesla, and his lack of relevant industry experience," CtW said.
CtW's harsh letter comes as the United Auto Workers union is attempting to unionize 10,000 Tesla employees, something Tesla has ardently pushed back against. When Reveal News reported last month that a string of worker injuries were hidden by management, a Tesla spokesperson accused the publication of "being a tool in an ongoing unionization drive."
Shares of Tesla have sunk 5% since the beginning of the year amid plunging bond prices and uncertainty of the company's cash burn situation.
"While Tesla has never reported a profit, going into 2017 shareholders could reasonably believe that the company was on the path to profitability," said CtW. "But since the beginning of 2017, Tesla's financial position has deteriorated along every dimension."