Elon Musk, the CEO of Tesla, could face sanctions from the company's board of directors if he refuses to apologize for supporting an antisemitic post on his social media platform X, according to Brad Lander, New York City Comptroller.
Lander is in charge of around $946 million worth of Tesla shares for public retirement funds in New York City. That sum translates to about a 0.1% ownership position in the manufacturer of electric vehicles. With his comments, Lander becomes the most recent Tesla stakeholder to demand that the EV manufacturer limit Musk's power. Prior to this, Musk's actions have drawn criticism from smaller investors such as Nia Impact Capital and Gerber Kawasaki Wealth & Investment Management CEO Ross Gerber.
On November 15, Musk supported an antisemitic remark on the social networking platform X, previously known as Twitter. The remark made the erroneous claim that Jews were inciting anti-White sentiment. Musk said that the author of the post was expressing "the actual truth."
On Tuesday, Lander said that Musk's act creates troubles for the company, citing a clause in Tesla's code of conduct that forbids bullying at any level.
According to Lander, there's real danger that Tesla's valuation and sales may suffer if he is seen as antisemitic.
It is still unclear what action the Tesla board will take. It has supported Musk throughout a number of issues, from the resolution of fraud accusations with the Securities and Exchange Commission of the US to the CEO's commitment of time and money to other projects including SpaceX, the company that makes rockets, Neuralink, a firm that makes brain chips, The Boring Corporation, and X. It also stood up for him when shareholders contested his $56 billion in remuneration in court.
Tuesday's trading for Tesla shares, which have almost doubled in value this year, was roughly where it was on Nov. 15 before Musk backed the antisemitic post.
Musk has refuted claims of antisemitism, and Linda Yaccarino, CEO of X, told staff that the data will reveal the company's efforts to combat antisemitism.
According to Lander, Musk should be informed by Tesla's board that he must take action, like taking down the post and expressing remorse. Lander also stated that Tesla's board ought to think about reducing Musk's pay, suspending him, or firing him if he doesn't comply.
He acknowledged that the board might be hesitant to take action against Musk because of his contributions to the company's success. On Monday, he wrote to Robyn Denholm, the head of the Tesla board, stating that if they did not act, Tesla's code of corporate ethics would be exposed as "toothless."
He also brought up the example of Henry Ford, the automotive titan, whose part in the spread of antisemitism was acknowledged as problematic in September by the Ford Foundation president.
The White House condemned Musk for endorsing the antisemitic article, saying it goes against the core values of Americans and that he was abortingly promoting antisemitic and racist hatred.
As per the most recent proxy statement released by the company, Musk holds the greatest single interest of 20.6% in Tesla shares. The independence of Tesla's board of directors has come under fire from proxy advisers, who advise investors on how to vote at annual shareholder conferences.
Major corporate advertisers have left X since Musk purchased it in October 2022, amid concerns expressed by civil rights organizations that a decrease in content moderation will result in a sharp increase in hate speech.
Some others have quit in recent days after a report published by liberal watchdog Media Matters for America claimed that their advertisements were being accompanied by Nazi-promoting content. Musk filed a lawsuit against Media Matters on Monday, denying this.
Additionally, Musk has made a number of remarks critical of the Anti-Defamation League, a charity that combats antisemitism. In lawsuits filed by both federal and state civil rights agencies, Musk and Tesla are also defending against claims of sexual harassment, racial discrimination, and other forms of workplace harassment.
During a Tuesday open conference call with investors, Kristin Hull from Nia Impact Capital stated that Musk's remarks represent a first in which investors have had to contend with a CEO who doesn't seem to look out for the best of his own company. Therefore, they are pleading with the board to intervene and resolve this problem.